Investing.com – This week, two new reasons dominate: it started under the banner of disappointment in the results of the G20 summit. The idea that China is unlikely to be in agreement with the United States and will be able to reduce the heat of a trade war has gained more and more influence on the markets. In addition, market participants were becoming increasingly suspicious that a triumphant agreement between Russia and Saudi Arabia to reduce oil production would not lead to significant results.
In this context, the price, which rose sharply on Monday from $ 59 to $ 62.5 a barrel, crashed for the first time in the corridor of $ 61-63, and Thursday returned quite sharply to $ 59.5. The American market was crawling. The index (DJI) after the jump last Friday for the week fell by 6%, 500 – by 5.7%. The index fell from a peak at the end of November of 6.7%.
In this situation, the Russian market seemed very decent: almost to the end kept together with oil and began to yield weakness only for the environment, but this was also clarified as much as possible. On Thursday, the sale took place, but the index was still able to meet a decline of only 3% and a pence of 1.7%. Yes, and the ruble kept "cordial", the slide was relatively smooth and generally did not exceed the percentage.
In addition to these two main stories, the new statements by the Fed representatives, who have practically disavowed the rumors about a possible easing of the rate hike policy, have put pressure on the markets. Even in Europe it was not good: the issue of pains at Brexit reappeared, and the Italian question is not resolved at all.
And now – joy! On Friday night, it was first announced that OPEC members agreed to reduce the production of 800,000 barrels a day, and then came the news that OPEC + members made a joint decision, so that the total decline of production will be 1.2 million barrels per day.
Markets have risen like a bullet from a well-designed slingshot. The Brent barrel rose again to $ 63.3, marking over 6% in half a day at the peak. The futures on the S & P 500 have currently added more than 1% and DJI – almost 2%, even the MSCI EM inert has gained 0.5%. And ours has completely overturned: the RTS has grown by 2.1% in half a day, the MosBirzhi index, for obvious reasons, only 0.8%. The ruble has prevented this last: its strengthening was consumed by the same 0.8%.
"The main joy is that there is an agreement with OPEC + at least on that reduction.The markets had a rather strong expectation, now the discharge comes.The movement was expected both in the oil market and in the currency pairs. At the same time, in the evening, the news arrived that the increase in the number of people employed in the non-agricultural sector in the United States in the last week amounted to only 155 thousand compared to the forecast of 200 thousand – and this gives hope that the Fed will slow rates, "said Yaroslav, Deputy General Manager of Finam. Kabakov.
"The very fact that OPEC + is willing to negotiate deals is great, our market has collapsed so badly and has been waiting for good news," said Yevgeny Kogan, president of the investment group Mosca Partners, on the situation. – However, I would not be very deceived until everything happens according to the following scheme: "Horror, horror – oh, not horror! Evviva-aaa!"
In reality, the markets will only return to the situation at the end of last week. "We see the bet of 5% of the price of oil lost after it became clear that the negotiations are going badly.That is, so far everything has returned to understand that the optimism of the beginning of the week is redundant" , says Denis Davydov, chief analyst of Nordea Bank.
And there is the possibility that the Friday jump is not the beginning of an event, but only a brief emotional outburst, which does not have a distinct continuation. "Next week will point to the I. The reduction in oil production will start only in 2019, there will be more results of the year, the negotiations between China and the United States, many other events will occur.And then c & # 39 it is moderation – the growth of the markets is clearly lower than the price of oil ", continues Yaroslav Kabakov.
"The total reduction in production will be 1.2 million barrels a day, but it is assumed that it will be 1.3 million or more, up to 1.5 million, and will last for a year and the current agreement will be valid only for six months and could be reviewed in April ", observes Denis Davydov.
At the same time, there are nuances in the distribution of reductions: for example, Saudi Arabia aims to reduce the production of 250 thousand barrels per day, and Russia – of 230 thousand. However, before the meeting, representatives of both countries, if they were talking about readiness to reduce production, then in much smaller quantities. For example, from Russia, there has never been a reduction of over 200 thousand barrels a day.
"The facts do not allow us to count on a more evident recovery of oil prices in the next quarter, in fact, OPEC + chooses the tactics of a more cautious approach, and if the previous agreements were concluded for a year, now the decisions they are harder to take in. This does not mean that the agreement will go to pieces – but we have to be together more often, "summarizes the analyst.
And if the Russian stock market had time to close before the sobering came, then the rest of the "restriction" sites proved to be Friday. Friday's oil prices halted growth and again fell below $ 63 a barrel at Brent. The fall of DJI at 20.50 MSK was 1.7%, futures – 1.4%. Dollar on the Moscow stock exchange with a minimum of 66.1 rubles. went up to 66.3 rubles.
(The text was prepared by Daniel Zhelobanov)