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| Rouble hits new all-time low despite rate hike | Rouble hits new all-time low despite rate hike |
| (35 minutes later) | |
| The benchmark price of oil has fallen below $60 a barrel for the first time since July 2009. | The benchmark price of oil has fallen below $60 a barrel for the first time since July 2009. |
| Oil prices have almost halved since June, but the producer cartel Opec is insisting it will not cut output to reduce the glut in supply. | Oil prices have almost halved since June, but the producer cartel Opec is insisting it will not cut output to reduce the glut in supply. |
| The cost of a barrel of Brent crude fell 2.15% to $59.93 on Tuesday morning, its lowest point since July 2009. Nymex US crude fell through the $60 floor on Monday, with further downward momentum on Tuesday morning taking it down 1.8% to $54.95. | The cost of a barrel of Brent crude fell 2.15% to $59.93 on Tuesday morning, its lowest point since July 2009. Nymex US crude fell through the $60 floor on Monday, with further downward momentum on Tuesday morning taking it down 1.8% to $54.95. |
| Prices softened after data showed that China’s factory sector had shrunk for the first time in seven months in December, further dampening demand for oil. | |
| On Monday, Opec officials reiterated their opposition to cutting production. Abdalla el-Badri, the Opec secretary general, said the group could manage an oil price slump without amending production. Suhail bin Mohammed al-Mazroui, oil minister of the United Arab Emirates, an Opec member, said there was no need for an emergency meeting of the cartel to help support prices. | |
| The falling price of oil intensifies the pressure on the Russian authorities, which raised interest rates by 6.5 percentage points to 17% in the early hours of Tuesday morning in a dramatic attempt to shore up the rouble, which has halved in value against the dollar since the summer. | |
| Russia relies on oil revenues to pay for a little more than half of its state spending and needs oil to be at $100 a barrel to balance the budget. | Russia relies on oil revenues to pay for a little more than half of its state spending and needs oil to be at $100 a barrel to balance the budget. |
| The central bank said the economy would contract by up to 4.7% in 2015 if the oil price remained at $60 for 12 months. | |
| Although the rouble rallied 9% against the dollar in early trading, these gains quickly unwound on Tuesday morning, with the Russian currency falling into negative territory, plunging to a new all-time low of 66 per US dollar. | Although the rouble rallied 9% against the dollar in early trading, these gains quickly unwound on Tuesday morning, with the Russian currency falling into negative territory, plunging to a new all-time low of 66 per US dollar. |
| Timothy Ash at Standard Bank said the Russian authorities had “a full-blown rouble crisis on their hands”, akin to the 1998 financial crisis when the currency collapsed, plunging the country into economic meltdown. |