Page 85 - RusRPTMay20

oil prices to recover to later in the year when the coronavirus burns out and life goes back to a semblance of normalcy.
Various forecasts for oil prices have been offered and guessing oil prices remains a mug’s game as oil remains the most volatile of all the commodities. Gaming out the various possibilities with a table of possible prices and implied RTS values means the market at current valuations expects oil to return to about $50: the RTS at 1,129 on April 15 implies an oil price of $56.4, whereas the actual price of oil on that day was $28.
Even this looks a it rich. Several commentators have predicted that oil will recover to $40 and the budget assumption is also still $42, which implies the RTS index will reach only 800, which some 250 point less than it is now. Other industry figures have said that oil will recover to $55 by the end of the year, which implies RTS will rise to 1,100, which is where it is now.
During the last oil shock in 2014 it took about two years for the RTS to breach 1,200 and fully five years for it to get to 1,600. Russia’s economy is in much better shape than it was in 2014 so in theory the recovery will go a bit faster this time. But the world still needs to work through how all the rescue and stimulus plans are going to work and there is still plenty of time for something to go badly wrong.
85​ RUSSIA Country Report​ May 2020 ​ ​www.intellinews.com