Mon, Dec 15, 2014

Oil is adding to its decline today causing shares of energy companies to follow suit. Extra stress is placed on Russian shares which has been taking hits from the drop in oil, among other factors such as sanctions. In dollar terms the drop is even worse. With the Rouble declining from 58 to nearly 66 as of now, the economy of the country is in dire need of changes. The government of Russia will have to start to take accountability for the sanction that have been placed on the country and move towards reforming the economy. Even with that there is still the countries dependency on oil for its revenues. This is causing a majority of the declines we are seeing on a daily basis with oil's drop.

Russia seems to be a leveraged play on oil in the near term with the added risk of geopolitical tensions. Should the sanction be lifted the currency could start to stabilize and over time more investment from the cheap loans the ECB is offering could be placed in the country.