Russia:The Ruble Crash And Putin's Choices - by Armin Rosen

Russian Ruble Free fall

This week's plunge in the value of the ruble adds another layer of uncertainty to the ongoing faceoff between Russia and the West.

The currency crisis, precipitated by US and EU sanctions against Moscow and a global decline in oil prices, threatens to crater the country's lucrative state-owned enterprises and send the economy into a nosedive.

The question is how an ever-unpredictable Vladimir Putin will respond.

Putin's nationalistic and often-aggressive policies have appealed to Russians' post-Cold War sense of grievance and won him soaring approval ratings at a time when the Russian president is loathed in most western capitals.

But the ruble dive threatens to radically shift the conditions that have allowed Putin to maintain his internal popularity in spite of the western powers' opposition to him.

As New York University professor and Russia expert Mark Galeotti explained to Business Insider, Putin's rule is predicated on a "social contract" that most Russians have found acceptable: "You stay out of politics.

You show enthusiasm but don't think you actually get a meaningful say in government. In return for that your life will improve and continue to improve."

Under Putin, Russia achieved perhaps the highest standard of living in the country's history while the government was able to replenish its coffers after periods of actual bankruptcy under Boris Yeltsin in the 1990s. Weaknesses remained:

The new prosperity was largely distributed through Putin's hand-picked former KGB colleagues and much of the country's wealth depended upon robust oil prices and access to European markets. Record military spending also threatens to sap resources and hamstring any government response to a future economic crisis.

The recent decline in oil prices, along with the economic consequences of international sanctions, could bring Putin's arrangement crashing down around him. "This social contract is being torn up," says Galeotti. "But Putin could tear it up more quickly and more assiduously if he's still determined to maintain his aggressive geopolitical stance. It really is one of those guns or butter moments."

Read more: http://www.businessinsider.com/the-ruble-crash-and-putins-choices-2014-12#ixzz3M7ha13MR

Read more: The Ruble Crash And Putin's Choices - Business Insider

North Sea Oil Exploration: Falling oil price could hit planned North Sea projects, analyst warns - by Magnus Gardham

Major new North Sea oil projects could be shelved as a result of plummeting prices, a leading industry analyst has warned.

James Webb, of global energy consultants Wood Mackenzie, said 32 untapped fields in the North Sea and across Europe were at risk if prices stayed below 80 dollars per barrel.

The benchmark price of Brent crude settled at 62 dollars per barrel at the end of last week, down 45 per cent since June.

Nearly three quarters of the new fields require a price of 60 dollars per barrel if oil companies are just to break even, Mr Webb said.

He added: "Major projects and investment in the UK and across continental and Mediterranean Europe could be at risk if prices stay below 80 dollars per barrel."

The 32 projects he identified are awaiting the green light on investment that would total €69 billion.

Read more: Falling oil price could hit planned North Sea projects, analyst warns | Herald Scotland

Energy: It's Coming: $65 Oil - by Derek Thompson

Gas prices are falling below $3 a gallon across the United States for two big reasons: (1) the world economy is growing slower than we hoped, and (2) global oil production is improving faster than we expected.

"India and China are slowing down,” said Charles K. Ebinger, director of the Energy Security Initiative at Brookings. "The IMF just downgraded Europe’s growth to less than 1 percent, and they're already quite energy efficient. Brazil’s a problem, too. All around the world there is no great growth story, and expectations are that things will stay that way or get worse."

There is also unanticipated supply. A few years ago, political turmoil was taking up to 2 million barrels a day off the market. Now production is roaring back in Libya, southern Sudan, Yemen, Nigeria, and even Iraq, and the global price of crude has fallen about 25 percent in the last five months. It's the same old story: low demand, high supply, etc.

Read more: It's Coming: $65 Oil - The Atlantic

Oil Pricing: Iraq, Saudi Arabia cut oil prices for Asia, Europe

Iraq has cut its November oil prices for customers in Asia and Europe following a similar move by top global exporter Saudi Arabia as OPEC producers compete for market share in the face of weaker global oil demand and prices.

Strong supplies and weak demand are forcing oil producers to lower prices, with Saudi Arabia - the world's largest crude exporter - cutting November prices for customers last week.

The move was largely interpreted as a move by the kingdom to launch a price war against fellow OPEC members despite calls from some within the organization for action to cut output and shore up prices.

International benchmark Brent crude oil fell below $90 a barrel to near a four-year low due to weak demand and abundant supplies.

Read more: Iraq, Saudi Arabia cut oil prices for Asia, Europe - Personal Finance - ArabianBusiness.com