ArmInfo. Reducing demand in the service sector due to falling oil prices will be less noticeable than in the construction sector and the real estate market in Russia, where labor migrants from Armenia are involved. This opinion was announced on March 12 through the Moscow- Yerevan-Bishkek-Tbilisi- Minsk video conversation by Alexey N. Zubets, Head of the Department of Sociology and Political Science, Financial University under the Government of the Russian Federation (Moscow, Russia).
He noted that recently, prices and demand for real estate in Russia have been growing, and if not for the recent events related to coronavirus and falling oil prices, the industrial market and housing construction would have demonstrated high growth rates. Fears of citizens, due to uncertainty, according to an economist, affect the desire to purchase real estate, and generally refrain from major purchases. In the short term, according to Zubets, while keeping old property prices, some demand will still remain. If the situation is not resolved quickly, crisis phenomena in the market cannot be avoided.
<It is clear that the market is cyclical and after a certain time will return to growth. But here the question arises - how long will be prolonged the whole story with the virus and oil last. Recently it became clear that the virus is much more resistant to treatment and high temperature, which means it can drag on for the summer. We hope that Russia and Saudi Arabia will agree and come to interim agreements to reduce production. Because such a war is not interesting for the Saudis or us>, he said.
At the same time, Zubets drew attention to the factor that before the November election, tU.S. President Donald Trump needs low gas prices. "It is possible that he will stimulate Saudi Arabia to put pressure on Russia," the economist said, noting that with this scenario developing, the restoration of the real estate and construction market could drag on until 2021.
In particular, Zubets noted that in the long term, oil will stabilize in the corridor from $ 35 to $ 55, which is quite comfortable for Russia, but the dollar, according to the economist, will range from 65 to 70 rubles. <In a few months, the situation should come to some more or less stable state, and we will understand how this crisis is destructive for the world economy and, in particular, the countries of the post-Soviet space. I hope that there will be no disaster. We are ready to overcome the consequences of this shock much better than it was 5 years ago>, he concluded. To note, as a result of the disruption of the OPEC + agreement, the cost of Brent oil futures immediately after the opening of trading on March 9 fell by 30% - from $ 45 to $ 31.02 per barrel. This is the biggest drop in Brent prices in a day since the Gulf War in 1991. The price of WTI oil after opening fell by 27% to $ 30. Due to a sharp drop, trading on the exchange was suspended for several minutes. Saudi Arabia has notified some market participants of its intention to significantly increase oil production up to 12 million barrels per day. In April, Saudi Arabia intends to increase oil production from the current 9.7 million b /d to more than 10 million b / d, which in the realities of the oil market is "equivalent to declaring war", and if necessary, above a record 12 million b / d. In addition, Riyadh on Saturday offered some of its crude oil at a much lower price - lower by $ 6- $ 8 per barrel - to customers in all regions. Officially, discounts are planned to be announced today.
Saudi oil company Saudi Aramco offered Arab Light crude oil to refineries in northwestern Europe at a discount of eight dollars per barrel. Traders believe that the goal of this step is to prevent Russian companies from selling their oil in Europe and returning them to the negotiation table for the OPEC + deal.
