Today crude oil is trading almost flat at the closing level on Wednesday. The oil rally seems to be coming to a standstill amid the lack of important events and reports which could support the oil market. The ruble asserts strength amid the rising oil prices. The Russian currency opened today with moderate gains.
Yesterday oil bulls welcomed data from the Energy Information Administration. As a result, Brent crude extended a rally for five days in a row and hit the highest level in three months. The US Department of Energy reported that domestic oil inventories dropped nearly 1 million barrels last week. The official data confounds the earlier report from the American Petroleum Institute which indicated massive expansion of almost 5 million barrels.
Since early Thursday, Brent crude has been trading at near 66 dollars 24 cents a barrel. West Texas Intermediate settled up at about 61 dollars a barrel. So, both benchmark grades are trading firmly higher benefiting from the industry data. Besides, oil prices are expected to gain solid support until the year end from the OPEC+ pact on oil production cuts.
The ruble’s strength rests on the expensive oil and the tax filing period which is around the corner. Nevertheless, yesterday the dollar/ruble pair edged up for a while. The Russian currency was hurt by the decision of the US Senate Foreign Relations Committee who approved legislation that would impose extra sanctions on Russia. The presidential election will be held next year. So, the US lawmakers want to take a harder stance against Russia. This factor could weigh the ruble down for a short time as the market nowadays neglects risks from sanctions.
Today the dollar/ruble pair is trading at 62.48. Investors are keeping close tabs on the annual press conference of President Vladimir Putin that kicked off at 12 noon. In the short term, the ruble’s dynamic will depend on the overall sentiment on emerging markets’ currencies. The ruble is expected to trade in the range of 62.20 to 63.00 against the US dollar in the nearest days.
At present, lots of commodity currencies and emerging markets’ currencies remain at elevated levels that were reached following the announcement of the first phase trade deal. However, the positive effect is overshadowed by the lack of details and the date of its actual conclusion.
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