Reuters examines oil prices: with an OPEC meeting imminent, crude prices have stabilized, as analysts expect to see the group agree to maintain its 'official output target stable around $70'.  Russia is surpassing Saudi Arabia in oil exports for the first time in the wake of OPEC production cuts.  'In no uncertain terms, Russia has been the biggest beneficiary of OPEC's sacrifice', says strategist Chris Weafer.  Saudi Arabian Oil Minister Ali al-Naimi believes that the current crude prices - between $68 and $73 a barrel - are acceptable for producers and customers alike.  Energy Minister Sergei Shmatko has met with Iraqi Prime Minister Nuri al-Maliki in an attempt to pursue Russia's aim of reviving Saddam Hussein era oil deals.  President Medvedev says that Russia must refuse requests for Ukraine to prepay natural gas transit fees, (with Kiev prepaying more than ...

After a long struggle with local authorities, Ikea will resume its Russia expansion as local officials are beginning 'to follow the different laws that exist' said the Swedish giant's Russia chief.  X5 Retail group has showed that net income has increased by 87% in the second quarter from a year earlier.  The Central Bank says that it may cut interest rates again after inflation remained unchanged last week.  Putin has said that an extra $4.6 billion will be raised for the state budget in 2010.  The Finance Ministry may reduce the amount of state capital that it had planned to issue in OFZ bonds this year.  Peter Hambro Mining, which plans to change its name to Petropavlovsk, increased its first-half profit more than fivefold following rising production.  The Central Bank appears to be tentatively optimistic ...

Yesterday we dug up some quotes from Chris Weafer speculating on the Kremlin's "unfinished business" in taking over control of Norilsk Nickel and creating a state-owned mining giant.  Here Mikhail Prokhorov of Onexim Group (and former Norilsk stakeholder) gives his opinion on the possibility of the merger.  Since becoming top dog over the fallen Deripaska, Prokhorov has been on a media blitz lately - see here and here.

Although the St. Petersburg Economic Forum was a little soured this year by the doldrums of the crisis and the humbling of global capitalism, the Russian government still closed the show with a bang with President Dmitry Medvedev promising a rapid rebound from the recession, while helping land "several tens of billions" worth of new deals from premiere Western corporations.  Nobody seemed to noticed that Finance Leasing Company (FLC), a state-owned aircraft company, became the first Russian government business to default on its bonds since 1998 (there may even be a fraud by FLC to divert funds toward other purchases).  Back on June 5th, the president had all the right words that international business wanted to hear:  "State ownership in most of the sectors of the economy should be viewed as an inevitable but a short-term solution."  Cautious optimism, ...

strongThe Ruble Devaluation Continues/strongbr /br /The ruble fell the most in nine years against the euro this week after the central bank widened its trading band twice and allowed the currency to fall by a further 3.8 percent, following last week's 1 percent devaluation. The currency retreated to a maximum of 5.8 percent over the week, although it recovered somewhat and was up 0.1 percent again today (Friday) over yesterday, trading at 39.1772 per euro at midday in Moscow. The currency has now fallen 16 percent against the dollar since the start of August, and added another 1.3 percent to its losses today, hitting 27.8412 per dollar and falling 1.1 percent (to 33.1020) against the currency basket which is targeted. The ruble thus lost 3.9 percent to the basket this week, in the process experiencing its sixth weekly drop.br /br /br /strongForeign Exchange Reserves Continue To Decline/strongbr /br /br /Russia’s ...

We all knew this was coming, and we knew that it would be painful. After Central Bank Chairman Sergey Ignatiev indicated during a televised address yesterday that authorities would finally allow the value of the ruble to slip against its mixed basket of currencies (55% dollars, 45% euros), the markets have reacted rather negatively, with the MICEX dropping 10%. Chris Weafer tells Bloomberg that "They're going to move the line in the sand back a little bit, where they hope they can defend it. If people start to lose confidence in the banking system, we could have a massive run on the banks as we saw twice in the nineties, and then the game is up.'' Most analysts expect that Russia is still holding enough FOREX to keep the ruble from collapsing, but will likely allow a gradual decline until oil prices bounce back.

The press and blogosphere are of course having a field day with the news that executives from Gazprom are enjoying a road show in Alaska this week to woo local representatives and meet with ConocoPhillips, possibly discussing participation in natural gas pipeline down to the lower 48 states. Given that Gov. Sarah Palin, the eminent "Kremlinologist," has placed so much emphasis on her foreign policy expertise with Russia, the Gazprom invasion is embarrassing to say the least. Some think that the timing of the Alaska visit carries a message: "The timing is as interesting as the visit itself," said Chris Weafer, chief strategist at UralSib Financial in Moscow. "Gazprom's entire senior management goes into Sarah Palin's backyard during a contentious election. There's a message there." However let's not lose the plot completely. Gazprom has had a business ...

One of the biggest problems with the United States becoming a debtor nation instead of a creditor is that we really lose any ability to help out our valued friends in times of trouble. As such, the banking crisis in Iceland has forced the government to turn to Russia - who is happy to throw some of its excess liquidity toward the relatively stable instruments of the country in the form of a $5.4 billion loan. Reykjavik is really not all that happy about it, and seems to display some awareness that this is exactly the kind of deal that can end up outsourcing your Ministry of Foreign Affairs to Kremlin oversight just like Finland. Prime Minister Geir Haarde tells the Financial Times, "We have not received the kind of support that we were requesting from our friends. So in ...

Financial News at Sibos September 16, 2008A series of setbacks has raised questions over whether Moscow could rival other centres and whether the rouble could become a reserve currency, writes Jason Corcoran The credibility of Moscow's ambition of becoming a global financial centre within five years has been called into question following a summer of systemic shocks to investor confidence and the arrested development of its market institutions.Highly liquid domestic markets, strong economic growth and a position at the heart of a booming region have contributed to the rapid growth of Russia's capital markets over the past decade.The dual government of President Dmitry Medvedev and Prime Minister Vladimir Putin have a blueprint in place for building Moscow's position as a financial hub. Some institutions, especially the Federal Anti-Monopoly (FAS) commission, have grown in stature due to its recent ...

Financial NewsJason Corcoran in Moscow23 June 2008 Investment climate is steady as new leader continues reform agenda Russia’s equity markets are enjoying the country’s honeymoon period under its new leadership, but investors remain wary of how the power-sharing arrangement will evolve.The changing of the guard on May 7 saw Vladimir Putin hand over the presidential mantle to his protégé Dmitry Medvedev. Within hours, Medvedev had nominated his mentor Putin as Prime Minister.The smooth choreography proved to be a fillip for Russia’s main stock markets and sparked a buying spree by foreign funds.The MSCI Russia Index was the best performing emerging equity market last month, rising 15.7%, and outperforming the MSCI EM Emea index, which rose 7.3% in the same month. Inflows recorded in the third week of May of $542m (€350m) were the highest in Russia ...