RE:RE:VLAD says......................................Can't speak for Vlad of course you twisted weasel but if you believe that Russia genuinely believes oil will stay at $40 for 3 years then you have been spending too long down the dark ferret hole and I would prescribe some sunlight.
iea forecasts are for nearly 1M b/d shoetfall for Q3 and slightly over 1m b/d shortfall for Q4. The fact that the iea does not have the courage to back its own data in its rhetoric against the majority consensus formed by a multitude of morons is their problem and not mine.
We are consuming the oil stock surplus by c1m b/d now, by mid 2017 the rate or surplus reduction will be nearer 3M b/d. Russia needs a higher oil price by June nest year otherwise they will have to slash public spending with all the resulting unrest that this would cause. If Russia believed that prices will stay at $40 for three years then they would know that this is well beyond the endurance of their state reserves.
Forgive me for pointing out the obvious but:
1. Russia is desperate for a deal as they can only withstand sub $60 prices for about another 8 months without taking drastic action.
2. They are not going to get a deal by saying that prices are likely to rise over the coming months are they. Although this is true, Russia cannot take the chance, they are too close to the bone, they are the broker in this deal and they will be falling over themselves to take 1M b/d or slightly less off the table to make it happen.
I believe that Bloomberg have said Russia cannot afford a production cut. Well, this just takes the buscuit, do Bloomberg really think everyine else is as dense as they are. If OPEC takes c1M off the table and Russia does likewise or slightly less then we will see a price range for oil of $60 to $90 by February - Russia's currently non-existent margins in terms of state dependency on oil would increase dramatically at this price range, getting them out of jail and we are supposed to believe that Russia would prefer a 5% to 10% higher output at sub $50 - for crying out loud!
Doug