«Oil of Russia», 15.12.14, Moscow, 19:40 After the November OPEC’s decision not to reduce the quota of daily oil production, the fall in world oil quotes accelerated. However, if at the beginning of December, a number of experts believe that “before the end of 2014 oil prices below $ 70 per barrel will not fall, and hysteria because of OPEC’s decision to die down a little,” but today analytical reports convinced: this is a long-term downward trend world energy prices.
The International Energy Agency (IEA) in the December report by downgraded the outlook on world oil demand in 2015 to 230 thousand barrels per day – up to 93.3 million barrels a day. At the same time sounded forecasts that in the case of the cold winter, you can expect – though not very large – rising oil prices, which can serve as an impetus to the formation of “upward” trend in its quotations.
In the meantime, Oil prices continue to fall and today it is impossible to predict the level at which they are stabilized. Thus, the price of Brent crude oil in the course of trading on the London Stock Exchange on December 12 fell to 61.8 dollars per barrel. Low prices benefit consumers and oil-importing countries. Producing countries whose economies are heavily dependent on oil exports and high prices for it, begin to bear heavy losses.
Among these countries and Kazakhstan, where the dependence of the economy and the budget on oil is growing every year . So, if in 2012 the share of energy products in the export structure was estimated at 74%, then in 2014 – 79.4%. Revenues from oil production and exports account for 25% of GDP and 60% of the balance of payments. Long-term fall in world oil quotations change the economic situation in the country. Financial problems exacerbated the fact that replenish the state budget revenues from Kashagan failed. The government was forced to lower its forecasts for economic growth in 2014 from 6% to 4.3%, to revise the budget for 2015 on the basis of prices in the $ 80 per barrel.
However, according to the IMF, the minimum oil price at which the budget of Kazakhstan may still be balance is 65.5 dollars. Therefore, in the case of long-term preservation of oil prices in the 60 (and below) dollars, Kazakhstan will require not only a new revision of the budget. And will have to pay for raw materials, one-sided structure of its economy and instead of hitting in the top thirty, the country in terms of income and quality of life may be in the second hundred countries. Lower oil prices will have a multiplicative effect in the form of more expensive imports, credit contraction, deterioration of the current account, the fall of the investment attractiveness of the national companies, retail trade, aggregate demand and employment.
However, officials diligently radiate optimism and assure that the country is not threatened, because in order to overcome adversity coming from the state means more than enough. In particular, the chairman of the National Bank Kairat Kelimbetov said that the February exchange adjustments take into account many emerging now risks. “The margin of safety that has been created, it is not melted. It is designed for at least 3-4 years in the most extreme option, “- he said.
But the smooth only on paper, but they forgot about the ravines. Today, many have seen the warning signs: the decline in the manufacturing industry, inflation, imbalance in consumer prices. The government has promised not to cut funding for social programs, but analysts are not sure whether Astana fulfill this promise.
In order to maintain sustainable growth has climbed into the oil “money-box”. Transfers from the National Fund increased by 325 billion tenge, reaching 1.96 trillion tenge (KZT 1.48 trillion – a guaranteed and 475 billion – the target). As a result, the share of transfers from the national “Potbelly” in the revenue part of the republican treasury increased from 27% to 32%. Not left unattended and budget in 2015. As a result of the increase of guaranteed and targeted transfers from the National Fund to 1.7 trillion and 707.5 billion tenge, respectively, their share in budget revenues will reach 35%.
Still nothing serious happened, but the funds from the National Fund already directed at solving the problems caused not so much by the fall of oil prices as low efficiency of its financial and economic policy. Given the systemic problems in the management structure, the level of corruption, technological backwardness is very doubtful that the makeup of the National Fund will allow to deploy based on the export of raw materials economy towards a more balanced and diversified.
The country over the past two decades, even for oil and gas sector has failed to develop any modern techniques required for exploration and development in new ways. Lack of public investment in the sector, the lack of market competition among manufacturers has led to degradation of the infrastructure and increasing the cost of energy: if earlier production cost of a barrel of oil in the country was estimated at 15-25 dollars, then today in 50. And in order to understand what may turn out to the country long-term collapse of oil prices, the knowledge of higher mathematics is not required. Learn more at http://www.oilru.com/news/442178/
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