Russian Rouble At Record Lows, Your Move Putin

28/11/14 -- The Russian rouble has fallen to new all time lows against the US dollar and euro this morning following OPEC's announcement that they are to continue crude oil production at unchanged levels.

Some (poorer) member countries, like Angola, Nigeria and Venezuela, were pressing for a cut in output to arrest the recent sharp decline in world oil prices. NYMEX WTI crude was nudging $107/barrel back in June, this morning it's hit $67.75/barrel, for a fall of more than 36 percent.

Other (richer and more powerful) countries like Saudi Arabia are more relaxed about keeping production high, in an effort to regain demand from the rapidly expanding US shale industry.

This morning I read that Russia's 2015 fiscal budget has been written up on the assumption that crude oil is worth $100/barrel and that the rouble (I insist on spelling it with an "o" - although most people don't seem to do so these days) is worth around 35 to the USD. Right now it's 50 to the USD.

That's that one fcuked then, and as if Putin wasn't in enough trouble already. (As a complete and total aside, did anyone else out there spot Big Bad Vlad playing right back for Everton last night? They put "Hibbert" on  the back of his shirt so as not to give the game away completely, but it was Vlad alright: Link)

So, next year's Russian budget is already in tatters, Western sanctions are maybe biting harder than Vlad would like to crack on and access to credit is tighter than a shark's arse at 50 fathoms. What's a deranged, vodka-soaked, homicidal megalomaniac going to do about that? Just accept it, or fight back?

Who knows what he might do next, but I don't see it being the former option do you?

As another aside, or maybe this actually isn't an aside at all, Reuters are running an interesting (and possibly ambiguously worded) story that says that Russia may consider "a floating tariff" on grain exports as a matter of last resort in 2015.

Is the rouble/crude on it's arse, sanctions hitting hard and no credit enough of a last resort? Only time will tell. The wheat market went through the roof in 2010 when Russia introduced an export embargo you will doubtless recall.

Back then Vlad promised the West that he wouldn't do that again, and that next time he'd let the market regulate itself. But that was back then, and this is now. Your move Vlad.