Salient to Investors:

  • Analysts say the easing of tensions in Ukraine offers little respite to Russia as low oil prices threaten a recession.
  • 58% of 19 economists say Russia needs its main export crude blend to trade at $100 per barrel or more to avoid a recession, while 19% say its current price is sufficiently low to put Russia’s financial stability at risk. The median economist says Russian GDP will grow 1% in 2015 and the probability of recession within the next year dropped to 60%.
  • Russia gets half of its budget revenue from oil and natural gas sales, thus limiting its ability to withstand sanctions.
  • Wolf-Fabian Hungerland at Berenberg Bank said even oil in the low three-digit prices would not unite Russia’s hands because the budget is already ailing and the potential funding needs of the banking system could quickly eat up all free resources, while its rainy day fund is too small to be a game changer.
  • IEA say global oil-demand growth is the slowest since 2011, and non-OPEC oil production is rising by the most since the 1980s.
  • Tatiana Orlova at RBS said Russia can go into recession even with Urals at $110 if Russian borrowers remain cut off from world capital markets for a long time.

Read the full article at

Click here to receive free and immediate email alerts of the latest forecasts.