Oil prices moved higher in the morning trade despite the recent decision of the OPEC+ members. The reason for growth was the latest data on oil inventories in the US. The report showed an unexpected drop in crude stockpiles to 2.3 million barrels per day.
The news background for the Russian ruble remains unfavorable even though it is traditionally supported by high oil prices. The tensions are rising on the border with Ukraine, so the risk of new tough sanctions against Russia is becoming more real. This will definitely put the national currency under pressure. The data from the American Petroleum Institute showed a decrease in weekly oil stockpiles to 2.3 million barrels per day. A week before, US crude inventories rose by 3.91 million barrels per day. Hopes for a stable recovery of the global economy and therefore a higher fuel demand boost oil prices. On Wednesday morning, oil edged higher by 0.5%. Today, Brent was trading at 62 dollars 90 cents per barrel. The expected price range for Brent is seen between 62.00 and 63.50 dollars per barrel. In the early session, WTI reached the level of 59 dollars 50 cents per barrel. It is likely to stay in the channel between 58.70 and 60.30 dollars per barrel. Meanwhile, neither high oil prices nor rising inflation in Russia could keep the ruble afloat. Even a possible increase of interest rates by Russia's central bank did not support the national currency. Experts are sure that the reason for the ruble’s weakness is the escalation of tensions in Donbass and the possibility of new military conflict in the East of Ukraine. In this case, Russia may face new tough sanctions from western countries. According to analysts, the ruble is likely to stop its downtrend and may soon enter the phase of correction. Yesterday, the ruble fell against the US dollar by 1% from 76.30 to 77.30, which was its lowest decline. From the technical viewpoint, the greenback reached the levels last seen in mid November 2020. However, the oil prices were also lower by almost 20$. Back then, oil was trading at 42 dollars per barrel compared to 59-60 dollars today. On Wednesday, the dollar/ruble pair is trading at 77.10. The pair is likely to stay in the range of 76.00 to 77.50 rubles per dollar. On the other hand, the economy of Russia is quite stable, and apart from the risk of conflict with Ukraine, the ruble has no other reasons to fall. Geopolitical risks push the ruble lower against the European currency as well. Yesterday, it depreciated against the euro by 1.5% to the level of 91.60. Besides, the euro advanced notably against the greenback which subsequently led to a rise in the euro/ruble pair. In the near future, the ruble is expected to trade in the range of 90.50 to 92.00 against the euro. Amid a partial improvement of the Covid-19 situation in some countries thanks to a mass vaccination campaign, market participants hope to see a quick recovery of the global economy. Close-up: The International Monetary Fund has also raised its outlook for global economic growth which is expected to reach 6% in 2021, while the previous forecast was 5.5%. At the same time, the IMF noted that the recovery process will be uneven in different countries.