Oil prices fall
Global oil price have fallen sharply over the past months, leading to significant revenue shortfalls in many energy exporting nation, while consumers in many importing countries are likely to have less to heat their home or drive their cars.
The reason for this change are two –fold weak demand in many countries due to insipid economic growth, coupled with surging US production. Added to this is the fact that the oil cartel open is determined not to cut production as a way to prop up prices, so who are some of the winners and losers. Russia. Propping up the rouble. The failing rouble and plunging oil revenue are some of president Putin’s biggest challenges.
Russia is one of the world’s largest oil producers, and its dramatic interest rate hike to 17 percent. In support of its troubled trouble, underscores heavily its economy depends on energy revenue, with oil and gas accounting to 70 percent of export incomes. Russia losses about two billion dollars in revenue, for every dollar fall in the oil price, and the world Bank has warned that Russia’s economy would shirk by at least 0.7 percent in 2015 if oil do not recover.
Despite this, Russia has confirmed it will not cut production to shore up oil prices ‘’ If we cut, the importer countries will increase their production and this will mean a loss of our niche market’s said energy minister Alexander Novak. Falling oil prices, coupled with western sanctions over Russia support for separatists in Eastern Ukraine have hit the country harder.
The Government has cut its growth forecast for 2015, predicting that the economy will sink into recession. Given the pressures facing Moscow now, some economics expect further measures to shore up the currency. Russia’s economy is forecasting to fall into recession in 2015 if oil prices do not regain ground.
The reason for this change are two –fold weak demand in many countries due to insipid economic growth, coupled with surging US production. Added to this is the fact that the oil cartel open is determined not to cut production as a way to prop up prices, so who are some of the winners and losers. Russia. Propping up the rouble. The failing rouble and plunging oil revenue are some of president Putin’s biggest challenges.
Russia is one of the world’s largest oil producers, and its dramatic interest rate hike to 17 percent. In support of its troubled trouble, underscores heavily its economy depends on energy revenue, with oil and gas accounting to 70 percent of export incomes. Russia losses about two billion dollars in revenue, for every dollar fall in the oil price, and the world Bank has warned that Russia’s economy would shirk by at least 0.7 percent in 2015 if oil do not recover.
Despite this, Russia has confirmed it will not cut production to shore up oil prices ‘’ If we cut, the importer countries will increase their production and this will mean a loss of our niche market’s said energy minister Alexander Novak. Falling oil prices, coupled with western sanctions over Russia support for separatists in Eastern Ukraine have hit the country harder.
The Government has cut its growth forecast for 2015, predicting that the economy will sink into recession. Given the pressures facing Moscow now, some economics expect further measures to shore up the currency. Russia’s economy is forecasting to fall into recession in 2015 if oil prices do not regain ground.