Russia: External sector recovery continues in October
November 30, 2016
In October, exports were USD 24.9 billion, which marked a 7.6% decrease from the same month last year. Although this was worse than September’s 3.0% decrease, it was a third consecutive single-digit decrease, following 21 consecutive months of double-digit contractions. Conversely, imports grew 8.2% in October, which followed a 7.9% expansion in September, marking a third consecutive expansion.
The trade surplus totaled USD 6.6 billion in October, which narrowed from the USD 7.4 billion in September. Compared to the same month of the previous year, the result was still well below a USD 10.0 billion surplus. October’s result brought the 12-month rolling surplus to USD 90.0 billion, the smallest accumulated surplus in nearly 12 years.
Following OPEC’s meeting in Vienna, crude oil prices jumped above USD 50 per barrel for the first time since October after the cartel sealed a deal to reduce production by 1.2 million barrels per day (mbpd) to about 32.5 mbpd for six months from the start of January. The markets reacted positively to the agreement, which includes an option to extend it until the end of 2017. On 21 December, the price of Urals oil jumped 10.4% above the same day of the previous month, settling at USD 51.7 per barrel as the oil cartel also clinched a deal with non-OPEC countries, mainly Russia and other big crude exporters, to reduce their supply by 558,000 barrels a day. The deal is the first global supply pact since 2001, with producers battling to reverse a price crash that began in mid-2014 and caused oil prices to remain at record lows for two years.
Author: Ricardo Aceves, Senior Economist