|Oil prices fell to less than $60/barrel in mid-December 2014, reaching their lowest level in five years, bringing the cumulative fall in line with that of other commodity prices compared to their early 2011 peaks. Although low oil prices will have a marked impact on a number of oil producers, their effect on oil importers will be diffused. Yet, low oil prices offer an opportunity for energy reform.|
|Strengthening of the U.S. dollar through the course of 2014 has sparked a flurry of warnings that a strong dollar may cause sharp depreciations in emerging markets. Generally, though, emerging markets have experienced mild exchange rate movements this year compared to those that occurred during previous episodes of sustained U.S. dollar appreciation, and growth in these economies is expected to strengthen through 2017.|
The Russian currency sank to a fresh low on Thursday even after the central bank raised interest rates. The ruble fell as much as 1.4% against the dollar to 55.5955 as investors speculated that the rate increase was not large enough to halt the currency’s 41% depreciation against the dollar this year—the worst performing currency after Ukraine’s hrynia. Russia’s stocks markets slumped with the benchmark MICEX Index and the dollar-denominated RTS Index sliding 2.2% and 3.5%, respectively.
Brent oil prices, the global benchmark, fell below $65 a barrel for the first time in more than 5 years after OPEC cut 2015 crude demand forecast to 12-year low. Brent for January delivery declined 2.5% (or $1.65) to $64.19 a barrel in afternoon trading on the London exchange, the lowest level since September 2009, and extending year-to-date drop to 41%. Meanwhile, West Texas Intermediate (WTI) lost as much as 3.1% to $61.82 a barrel on the New York exchange, the lowest level since July 2009.