Russian Budget and Oil Prices
"... He said Russia's 2015 budget deficit was expected to be 0.5 percent of gross domestic product (GDP) - higher than a previously expected 0.4 percent - while budget deficits for 2016 and 2017 are expected to reach around 0.6 percent of GDP.
He said previous expectations were based on an expected oil barrel price of $96.
"(The oil price) has been clarified and because of that the deficit has risen. It was 0.4 percent of GDP and is now 0.5 percent," he said, speaking to journalists.
Russia's Economy Ministry also raised its expectations for 2015 growth to 1.2 percent from a previous 1 percent forecast, Interfax reported.
Oil prices have fallen recently on demand worries and Russia's Urals URL-E has fallen to $94.50 per barrel.
Economy Minister Alexei Ulyukayev said Russia may divert funds from its separate National Wealth Fund or from pensions.
Russia relies on oil and gas for around two-thirds of exports and half of federal budget revenues. Over the course of a year, each $1 fall in the oil price wipes around $1.4 billion off federal tax revenues.
US Fracking Breakeven Points
" ...LEVI: On the flipside, no one expects Vladimir Putin to cut his own oil exports in order to inflict harm because he can't sustain his spending - his state - his budget without the revenues from oil cells.
YDSTIE: Fadel Gheit, managing partner and head of oil and gas research at Oppenheimer and Company, says oil prices will spike higher when severe disruptions occur. But he thinks global supply will continue to grow and keep prices in check. He says that will happen as fracking technology improves, reducing the costs of production.
FADEL GHEIT: The break-even point continues to decline. I mean, yes, we needed $80 oil for the North Dakota bargain oil development to continue. Now it's about 65. Five years from now, it could be 50 or even 40.: http://wmuk.org/post/turmoil-roiling-abroad-why-arent-oil-prices-bubbling
-bth: if this is correct then global economic weakness in demand, surging production from almost all sources in the ME and US will keep prices low. As it happens breakeven for the Russian budget is in the $80s and US fracking breakevens are falling below those levels. One might expect oil prices to stay surpressed for some time.