Results of the Week: OPEC + has emerged from a stalemate, Russian stocks have increased
Russia has agreed to join the OPEC + countries and will reduce oil production by 230 thousand barrels per day. Oil rose immediately by 6%, the ruble strengthened and Russian market prices increased
OPEC and its allies, including Russia, have agreed to cut oil production by 1.2 million barrels per day. This is more than expected market. The agreement was on the verge of collapse, primarily on fears that Russia would not make a major reduction in oil production, and therefore due to the fact that Iran, which was subject to sanctions United States, receives no concession and blocks the agreement.
As a result, exporters managed to overcome the deadlock and reach an agreement. October will be the starting point for reducing production. The agreement will be valid for six months with the possibility of reviewing its terms in April. The OPEC countries will reduce the production of 800 thousand barrels per day from 2019 and the non-OPEC countries will reduce the production of 400 thousand barrels.
At the end of the day, the cost of Brent increased by 6.25% to $ 63.2. The Texas grade WTI rose 5% to $ 54 a barrel. Russian actions reacted with a push.
OPEC + decision helped the ruble
Thanks to the increase in oil prices, the ruble rose against the dollar and the European currency of 1%. Next week, the main event for the currency market will be a meeting of the Central Bank's Board of Directors, to be held on Friday 14 December. The central bank will announce a key rate decision and may also report a return on currency purchases in the open market under the budget rule.
At the end of November, Elvira Nabiullina, president of the Bank of Russia, announced that the Bank of Russia could return to the purchase of foreign currency for the Ministry of Finance in the context of the budgetary rule on January 15, 2019. The deadline for the return of the Central Bank to currency purchases could be announced at the end of next week.
"Most likely, the Central Bank will decide to keep the key rate unchanged at 7.5%, but if the Central Bank decides to raise the interest rate, it will become an economic event of the year, since that decision would speak of a radical change in monetary policy in Russia, "said Natalya Milchakova, deputy director of the analysis department of Alpari. According to his forecasts, next week the ruble will remain in the 66.5-67.2 rubles versus the dollar and 75.4-76 rubles in the euro corridor.
The stock market closed the week up
Oil has helped Russian actions to increase. The MosBirzhi index rose 0.79% to 2,431.3 points. In the last week, the index rose by 1.62%. The RTS rose 2.1% to 1,157.9 points. The increase in the RTS index from the start of the week reached 2.82%. The leaders of today's positive dynamics were the shares of LUKOIL (+ 2.1%) and Rosneft (+ 2%).
The "Magnet" sales network decided the amount of the provisional dividend for nine months. Shares "Magnit" added 0.5%. Payments per share for three quarters exceed last year's payments for four quarters in monetary terms. The register of shareholders will close in two weeks, on December 21st.
Papers "Tapes" fell 7.7% after news that the Russian hypermarket chain has changed its CEO. Instead of Jan Dunning, who led the company for almost ten years, "Tape" will be directed by German Ting. In the last five years he has been commercial director of the commercial network.
The main event on the bond market was the placement by Gazprom of the bonds in yen. Recently, the gas giant is borrowing money in foreign markets, Refinitiv reports. Gazprom has already placed bonds in pounds sterling, euros and Swiss francs. The last time a state company borrowed money in yen a decade ago was calculated at Refinitiv.
"The standard transaction in this market is 50 billion Japanese yen We initially focused on it, but in the end we did more than we had planned," Reuters quotes Cyril Kondrashin, head of the debt capital markets department for CSI, JP Morgan, who organized the agreement. As a result, Gazprom borrowed 65 billion yen ($ 577 million) from investors at 1.01% per annum; the demand exceeded the offer, writes Refinitiv.