Kazakhstan Prepares For $40 Oil, Gary Schilling Says “Oil Going To $20” | Zero Hedge.
“People should not be worried,” explained Kazakhstan President Nursultan Nazarbayev in a TV address over the weekend, “we have a plan in place if oil prices are $40 per barrel.” Kazakhstan, the second largest ex-Soviet oil producer after Russia, explains “there are reserves which could support people, preventing living conditions from worsening.” However, if A. Gary Schilling’s reality check of $20 oil being possible comes to fruition, as he explains, what matters are marginal costs – the expense of retrieving oil once the holes have been drilled and pipelines laid. That number is more like $10 to $20 a barrel in the Persian Gulf… We wonder who has a plan for that?
The Kazakh President says “don’t worry”, as Reuters reports…
Kazakhstan, the second largest ex-Soviet oil producer after Russia, has plans in place should global oil prices fall as low as $40 per barrel, President Nursultan Nazarbayev told local TV channels.
“Kazakh people should not be worried. We have a plan if oil price are $70, $60, $50, $40 per barrel,” he said, according to a transcript published on his website www.akorda.kz.
“There are reserves which could support people, preventing living conditions from worsening,” he said, without providing any details.
Kazakhstan’s National Fund, which collects oil revenues, stood at $76.8 billion at the end of November. Separately, the central bank’s net gold and foreign exchange reserves stood at $27.9 billion.
Nazarbayev has also urged the Kazakh people not to worry about the slide in Russia’s rouble currency, which has lost some 45 percent of its value versus the dollar this year.
But A Gary Schilling is less sure… (via Bloomberg View)
