Russian Energy Revenues Represent a Lifeline

Russian Energy Revenues Represent a Lifeline


Russian Energy Revenues represent a lifeline for the economy isolated from the global financial system,
in light of the escalation of the Russian-Ukrainian war, the Russian economy benefited from the rise in energy revenues,
as the current account surplus in Russia grew below expectations.



Russian Energy and The Current Impact
The Last Sanctions
The quarterly total




Russian Energy and The Current Impact


We find that the difference between exports and imports, known as surplus in the current account reached 51.9 billion dollars during the third quarter of this year.
This decline is from its record levels of 76.7 billion dollars


The quarterly total


is the smallest so far this year, while the surplus seems to be declining in September compared to August,
The Bank of Russia does not publish monthly total figures,
but the previous accumulated figures can be used to estimate them,
while the gains it made from the rises in energy prices were the lifeblood of the Russian economy,
which is still largely isolated from the global financial






The Last Sanctions


The sanctions imposed on Russia for its war on Ukraine by the European Union included banning the shipment of Russian crude oil in all regions of the world through EU tankers,
in addition to amending the sanctions that set the ceiling on Russian oil prices,
which was supported by the US Treasury Department,
while Russia decided not to sell permanently to anyone who tries to rely on the price ceiling,
and therefore Russia’s Gazprom company decreased by about 61% from the previous year,
mainly after the suspension of the historical destination of Russian gas to Europe.





U.S. Oil inventories rise for the sixth week in a row

U.S. Oil inventories rise for the sixth week in a row

U.S. Oil inventories rise for the sixth week in a row: On Tuesday Nov2, 2021 the American Petroleum Institute (API) reported a rise in U.S. Crude stockpiles for the sixth week in a row.

Evest follows everything that goes on the market in the following report.


Oil inventories

Oil prices for the week

Oil production weekly rates

Bank of America expectations for oil prices by June 2022

Russia’s oil production will rise from October

Russian experts’ forecasts for Russian oil production



Oil inventories

This week, the API expected a rise of 3.594 million barrels in crude stockpiles,
while analysts expected a rise of 1.567 million barrels.

However Cushing stockpiles are at the top of actions again, this week.

Despite the rise for the sixth week in a row, U.S. Crude stockpiles are still less by 57 million barrels than they were at the year’s beginning.

In the last week, the API declared a rise of 2.318 million barrels in oil stockpiles,
while analysts’ expectations were of 1.650 million barrels rise.

The API declared a decline of 552.000 barrels in gasoline stockpiles by the week ending Oct26, compared with the previous week’s rise of 530.000 barrels.

Distillate stockpiles rose by 573.000 barrels throughout the week, besides last week’s rise of 986.000 barrels.

Cushing stockpiles fell by more than 30 million barrels this year.

The API proclaimed another decline of 882.000 barrels, for the week, besides last week’s decline of 3.734 million barrels.

Oil prices for the week

On Tuesday oil prices fell before data publishing, West Texas Intermediate crude fell in dealings to settle at $83.52 a barrel,
while Brent crude was at $84.52 a barrel.

West Texas Intermediate crude and Brent crude fell 0.62% and 0.22% in a row.


Oil production weekly rates

U.S. Oil production for the week ended Oct22 (the last time, the EIA reported  data about the production)
remained at the same rates of 11.3 million barrels per day,
still less by 1.8 million barrels per day than its highest level ever of 13.1 million barrels which has been reached before pandemic struck the USA.

Bank of America expectations for oil prices by June 2022

This week, Bank of America declared in a research report, reported by Bloomberg that Brent crude will record $120 per barrel by June 2022.

The catalyst to raise Bank of America predictions was the current global energy crisis,
which witnessed a rise in prices of crude oil, coal, natural gas and liquid natural gas due to market’s tensions.

One month ago the Bank of America expected for oil to approach $100 a barrel in the next six months if the winter was colder than usual,
this was believed to be the most important driver for the global energy markets.

But now predictions rose, the global demand recovery will continue to exceed the offered in the next year and half,
which led to stockpiles’ decline and made prices rise.

In September the bank pointed to the bad situation of the European energy markets,
which consumed most of the stockpiles, to lead by turn to strong price changes.

Now, the vision has changed, diesel and plane fuel recovered besides the refineries restrictions, to accelerate the rise in prices in the next year.

Next Thursday OPEC’s production will be reassessed, although it is expected from the group to stick to its plan of adding 400.000 barrels per day.

Yet the worst in such a plan is that OPEC has failed in adding the barrels according to its plan up till now.

Traders and other banks predict for the oil to go to $100, as Goldman Sachs bank estimates that demand approaches 100 million barrels per day,
pre Covid-19 numbers; it is predicted for demand to rise as winter’s calming season is approaching and calls to raise planes fuel demand in the next year.



Russia’s oil production will rise from October

Russia increased its production of crude oil in October for the second month in a row,
as it raised its production according to OPEC’s easing group production agreement.

Total crude oil and condensate production rose 1.1% from September’s rates to approach 10.843 million barrels per day in October,
according to Bloomberg’s estimations of Russian energy ministry data.

However, the Russian production of condensates of 800.000 bpd to 900.00 bpd isn’t a part of OPEC’s reductions,
so it isn’t easy to assess the amount of crude oil being actually provided by Russia.

Ministry of energy data doesn’t distinguish between crude oil and condensates production;
consequently the market and analysts assess crude oil production by estimating condensates’ production levels.

According to Bloomberg’s calculations, if Russia provided in Oct the same amount of September’s of 910.000 bpd,
then the Russian crude oil production was 9.93 million bpd or 120.000 barrels exceeding October’s share.

Russian experts’ forecasts for Russian oil production

In the last month, Alexander Novak, the vice prime minister of Russia said that Russia is providing 9.9 million bpd of crude oil
in Oct and it has the power to raise production to 11.4 million bpd.

“Russia’s production of crude oil will be 9.9 million bpd in Oct, at the same time Russia is adapting its production with OPEC.”
Novak said in the middle of the last month.

Russian officials including Novak said in the last months that Russia is expecting for its crude oil and condensates’ production to be back to pre-pandemic levels.

According to OPEC’s last distribution of shares, Russia has the ability to produce 9.913 million bpd in November,
which is the same production level of the actual leader and first producer of OPEC, Saudi Arabia.

OPEC’s energy ministers are meeting on Nov4 to determine the production shares of December,
amid consuming countries’ pressures including the USA to raise the offered amount by more than 400.000 bpd of the monthly adding’s,
which have been agreed on up till now.