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Brent crude oil price falls below $32 per barrel

January 11, 19:34 UTC+3
Since the beginning of 2016 Brent price has fallen 12.5%
1 pages in this article
© ITAR-TASS/Alexey Filippov

LONDON, January 11. /TASS/. The price of Brent crude futures contract for February delivery in the course of trading on the London Stock Exchange (ICE) fell by more than 5% to $31.94 per barrel.

The dollar rose by 1.7% to around 76 rubles, the euro rose by 2.8% to 82.8 rubles.

Since the beginning of 2016 Brent price has fallen 12.5%. The Russian market reacts to a sharp drop in prices of crude oil during the New Year's holidays.

A significant acceleration of the decline in oil prices happened on January 6 against the decision of the state-owned Saudi Aramco to increase the prices for basic grades of oil for its customers in Europe. Thus, the cost of one barrel for the countries of northwestern Europe decreased by $0.6 and $0.2 for the countries of the Mediterranean region. However, the price of a barrel of Extra Light oil fell by $0.5 for the US customers.

"The news that Saudi Arabia has reduced the price of oil for Europe caused a new wave of pressure on the oil market, and therefore the Brent price on Thursday was close to $32 per barrel," VTB Capital analyst Maxim Korovin said.

At the same time, oil prices will remain low for a longer period, Tom Levinson at Sberbank CIB said. "The resumed decline of Brent price, which now has significantly descended below the minimum value of 2008, has a strong pressure on the ruble," he said.

This morning the dollar on the Moscow stock exchange rose by 1.55 rubles and amounted to 76.31 rubles, surpassing the mark of 76 rubles for the first time since December 16, 2014. In addition, the euro soared by 3.35 rubles to 83.97 rubles.

As of 16:00 MSK, the ruble began to regain its positions amid the slight rebound in oil prices. The dollar increased by 0.89% to trade at 75.42 rubles. The euro rose by 1.3% to 81.93 rubles.

First trading days on Russian stock market in 2016

Trading on the Russian stock market during the holiday week were held on January 4-6. Nevertheless, On January 7 and 8 Brent crude oil has fell by 3%, reaching $32.16 per barrel for the first time in 11 years. Russian stock indexes began to regain positions from the start of trading on January 11. At the opening of trading session on Monday the MICEX index fell by 2.98% to 1696.49 points, below 1700 points for the first time since October 2015. The RTS index fell by 4.77% to 701.8 points.

Not only oil influences the Russian stock market. The rapid collapse of the Chinese stock exchanges at the beginning of 2016 had a significant pressure on all global markets - from emerging markets to European and American markets.

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