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20MAY13
Federal budget returned to the red in April
In April, the monthly federal budget printed a deficit of 0.3% of GDP (RUB 13bn), returning again to the red after one month of surplus, according to the Ministry of Finance. Revenues and expenditures were at RUB 1.12tn (+2.3% YoY) and RUB 1.13tn (+5.4% YoY), respectively. Non oil and gas revenues decreased 10.6% MoM and were up a mere 0.3% YoY in March to RUB 534bn, while oil and gas revenues jumped 10.8% MoM and 4.3% YoY to RUB 584bn. MinFin’s outstanding deposits in the banking system added RUB...
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15MAY13
Trade surplus edged up in March on one-off - to USD 16.1bn
According to the CBR, the trade surplus in March edged up to USD 16.1bn (from USD 15.9bn in February), although it contracted 11.0% in annual terms. Exports continued to decline, although the pace of the drop decelerated to 5.5% YoY (and in MoM SA terms, it improved to +0.9%). Annual imports growth slid into the negative, declining 2.0% YoY (gradually weakening from 10% YoY growth in January and the 4.4% YoY increase in February). In MoM SA terms, it dropped further, to -1.6% (from - 0.4% a month...
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14MAY13
OPEC crude production picking up
OPEC crude production picked up in April 0.3mmb/d MoM according to the EIA’s Short-Term Energy Outlook (STEO) and OPEC’s Monthly Oil Market Report (MOMR), which is based on secondary sources. That was largely down to production hikes by Saudi Arabia and Iraq. Other forecasters have a more modest MoM increase (0.2mmb/d on average) but the consensus view is that OPEC production is picking up and is above the group's 30.0mmb/d collective production target, which could prove significant ahead of its...
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14MAY13
Non-CIS imports jumped 8% YoY in April
The Russian Federal Customs Service has reported that the growth in non-CIS imports accelerated to 8.1% YoY in April, from 0.5% YoY in March, bringing absolute volumes to USD 23.1bn. Non-volatile components improved to 5.3% YoY, from almost zero in the previous month, while the growth in the import of food products advanced visibly to 9.2% YoY (from -2.2 YoY in March). The import of investment goods kept picking up in April: they increased 6.8% YoY (vs. 3.2% YoY in March). Importantly, the decline...
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13MAY13
Rouble REER weakened 1.5% MoM in April
The rouble real effective exchange rate depreciated 1.5% MoM in April, softening significantly from the 0.1% monthly decrease in March. In real terms, RUB weakened 1.5% MoM against USD (vs. -2.0% YoY in a month ago) and 2.1% MoM against EUR (+0.8% YoY in March). The greater RUB REER appreciation in April (vs. that seen in March) was partly a result of the average nominal rouble weakening against EUR (RUB was down 2.0% MoM against EUR, according to official average rates), despite the CPI spiking...
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7MAY13
FY13 Brent forecast unchanged at USD 106/bbl
In our regular monthly review, we leave our current FY13 Brent forecast unchanged at USD 106/bbl. However, given the steepness of the fall in the Brent price at the start of April and our expectation that the price is likely to remain under pressure, we have reprofiled our quarterly forecast. We now expect Brent to average USD 102/bbl for 2Q13 and to end the quarter at USD 102/bbl, down USD 5/bbl and down USD 2/bbl respectively on our previous forecasts. We leave our other macro forecasts unchanged...
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18APR13
EIA data – Market unmoved by unexpected crude inventory draw
In yesterday’s EIA Weekly Petroleum Status Report, US crude inventory was down 1.2mmbbl (-0.3%) WoW. That was only the third crude inventory draw YTD and came unexpectedly as market participants were instead looking for a 1.2mmbl build. Even so, the market appeared to pay little heed to that. Brent continued to trend lower, back into the sub-USD 100/bbl territory as at the time of writing. As observed in recent weeks, the movement in crude inventory was curiously lower than the numbers suggest....
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12APR13
IEA Data - April report
In its April Oil Market Report (OMR), the IEA has global oil demand in 2013 growing 795kb/d (0.9%) YoY to 90.6mmb/d, a slight reduction to the previous OMR’s 820kb/d YoY growth estimate but leaving the 2013 demand estimate unchanged. The IEA notes several ‘bright spots’ for non-OPEC supply in 2013; namely the reported restart of South Sudan production and the restarts of Elgin/Franklin in the North Sea, Peng Lai in China and Frade in Brazil. The IEA forecasts non-OPEC supply to grow by over 1mmb/d...
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12APR13
Federal budget returned to the black in March
In March, the monthly federal budget printed a surplus of 0.5% of GDP (RUB 141bn), following three consecutive months of deficits, according to the Ministry of Finance. Revenues and expenditures were at RUB 1.12tn (+2.0% YoY) and RUB 1.09tn (+6.8% YoY), respectively. February’s deficit was revised to 3.1% of GDP (from 4.9% of GDP previously). Non oil and gas revenues increased by more than a half MoM, recovering (as usual) from the seasonally lower level in February to RUB 593bn (and up 4.2% YoY)...
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12APR13
MinEconomy revises its forecasts
Yesterday, Deputy Minister for the Economy Andrey Klepach announced some amendments to the current official forecasts for 2013. Among the principal changes, MinEconomy revised its FY13 estimate for Russian GDP downwards to 2.4% YoY (from 3.6% YoY), despite the higher forecast for average oil prices of USD 105/bbl (it had previously expected USD 97/bbl). MinEconomy's estimates for the aforementioned indicators are now almost exactly the same as our base case forecast. We see downside risks to...
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11APR13
Trade surplus started declining in February
According to the CBR, the trade surplus in February edged down to USD 15.9bn (from USD 17.7bn in January), contracting 21.4%in annual terms. Exports continued to decline, with the contraction intensifying to 7.2% YoY and slid into the red in MoM SA terms: -0.7%. Annual imports growth moderated from a surprising jump of 10.0% in January to 4.4%, but dropped -0.9% MoM SA (from 2.3% MoM SA a month ago). Although softer imports growth (and we see this moderation as a correction after the significant...
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4APR13
Energy prices update
We have published our first monthly update of our energy prices forecasts. In light of the firmer spot price at the end of March than we expected, we tilt our 2Q13 average Brent forecast to USD 107/bbl (+USD 3/bbl), and the FY13 to USD 106/bbl (+USD1/bbl). We continue to see Brent at USD 100/bbl at YE13, which remains our long-term price assumption. We are introducing monthly mark-to-market updates to our Brent forecasts in order to provide tighter coordination between our published views on energy...
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4APR13
MinFin wants to start converting oil revenues in the open market
Yesterday, Anton Siluanov, the minister of finance, said that MinFin would start FX operations in the open market for accumulating/spending the Reserve Fund in 2H13. He added that MinFin would be offering hard currency at banks' deposit auctions. The change of timing comes as a surprise, since MinFin had previously planned to start operations in the FX market “before 2015” (i.e. when the CBR would be closer to a fully-fledged inflation targeting regime). We had therefore interpreted this as meaning...
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3APR13
European gas: Unusually cold weather continues
European hub gas prices climbed above the USD 400/kcm (USD 11.5/mmbtu) mark in late March, the highest since late 2008, before adjusting lower at the start of April on the switch to the May contract. The recent high European gas prices likely reflect dwindling gas storage and stronger than expected demand amidst a colder than usual end to winter/start to spring. Gas storage levels have plunged in Europe since the turn of the year, with gas storage at the UK’s NBP dropping as low as 6%. Low gas storage...
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3APR13
4Q12 GDP slowed to 2.1% YoY
Rosstat has released its revised FY12 GDP numbers and published 4Q12 GDP statistics. The preliminary 3.4% YoY print for real GDP growth in FY12 was approved, while the nominal volume of the gross domestic product was revised marginally upwards to RUB 62,599bn (USD 2,015bn). The recent data is in line with the previously announced FY12 and 9mo12 numbers and underpins that throughout last year the pace of real GDP slowed steadily from almost 5% at the beginning of 2012 to 2.1% YoY in 4Q12. To recap...
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1APR13
FY12 BoP final estimate
Late Friday, the CBR published its final estimate of BoP in 2012. The CA surplus was revised down slightly from USD 81.3bn to USD 74.8bn, mainly due to downwards revisions in the trade balance (from the first estimate of USD 195.4bn to USD 193.3bn), and the investment income balance (from -USD 53.4bn to -USD 55.5bn). On the financial account front, the FDI balance returned to the black for the first time since 2008, with a USD 0.4bn surplus, mainly on the back of smaller outflows, as inflows were...
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27MAR13
Now European forward gas starts to rally
With potentially record breaking cold weather set to continue in Europe and storage levels drained, it is perhaps no wonder that month-ahead gas prices are starting to rise. Day-ahead prices have been strengthening since mid/late February and spiked in March where they have traded above our estimate for the raw oil-linked contract price for almost half the month, and remain well above the oil-linked price. The risk of a gas shortage is now front page news, particularly after problems with the...
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22MAR13
MinEconomy says economy stalled in February
According to MinEconomy, real GDP growth in February decreased further to 0.1% YoY, from 1.6% YoY in January. In 2mo13, Russia’s economy added 0.9% YoY (vs. 3.4% YoY in 2012). Adjusting for seasonal and calendar factors, the MoM change in GDP remained negative, but improved to -0.1%, from -0.3% in January. The key factors behind the drag were the YoY decline in exports and the slowdown in retail sales growth. The latter can be explained by the shift in households’ spending mode towards longer investments...
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21MAR13
EIA data – Unexpected, counter-seasonal crude inventory draw
According to yesterday’s Weekly Petroleum Status Report for the week ended 15 March, there was an unexpected and counter-seasonal drop in US crude inventory, down 1.3mmbbl (-0.3%) WoW to 382.7mmbbl. Markets had expected a 2mmbbl build in crude inventory. The inventory draw was also the first in 9 weeks for crude and there were also inventory draws for gasoline and distillate. The two main contributing factors to the crude inventory draw were a 0.2mmb/d WoW drop in crude imports and, more importantly...
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15MAR13
Federal budget prints 4.9% of GDP deficit in February
The monthly federal budget deficit reached RUB 244bn, or 4.9% of GDP, in February 2013, according to the Ministry of Finance. Revenues and expenditures were at RUB 0.9tn (+10.0% YoY) and RUB 1.1tn (+9.4% YoY), respectively. January’s deficit was revised to 0.3% of GDP (from 1.8% of GDP previously). Non oil and gas revenues decreased 40% from January to RUB 376bn (but were up 17% YoY), while oil and gas revenues picked up 9.7% MoM to RUB 511bn (+5.2% YoY). MinFin’s outstanding deposits in the banking...
