All that oil could have done for the ruble
The rouble is trading with a slight decrease in protivooterne with the rapid appreciation of oil prices due to the situation around the statements of OPEC and new details of natural disasters in Indonesia, which is the last member of the oil cartels. As of 11:45, the ruble was trading at 65,35 the dollar, losing yesterday’s high at around 64,85 approximately 0.73 per cent. In tandem with the Euro, the rouble strengthened but then slightly corrected, to the level 75,30 (max for the last day 75,20).
Apparently, investors do not want to support the strengthening of the domestic currency, as fear of renewed buying of currency by the Central Bank. Recall that according to the budget rule, the price of oil above $40 per barrel is the purchase of dollars in reserves and gold reserves. A departure from it, were announced by officials of the Bank of Russia in mid-September in connection with the increased volatility of the ruble to facilitate the normalization of the situation. Since then the ruble has appreciated 7%, and obviously, the urgency of the topic has waned. Now a word for the Central Bank, which, in fact, the market is waiting with caution.
Meanwhile, early this morning GMT, the Indonesian Ministry said the death toll from the earthquake and tsunami rose for the day by 7.5% and amounted to 1234 people. By the way, Indonesia is the most populated country in Southeast Asia, a major producer of oil with production of about 740 thousand barrels per day and, as mentioned above, in the past a member of OPEC. Brent crude jumped to nearly $85 a barrel – its highest level in the last four years.
As for the regular skirmishes OPEC management with Donald trump that although it happened on Saturday, the ripples still divergent. We will remind that the President of the United States Donald trump has called Saudi king Salman on Saturday to discuss the possibility of the Saudis to replace the shortfall in Iranian oil exports due to sanctions, to prevent a sharp rise in oil prices, however, understanding from his companion in this issue trump is not achieved. Salman said that the pricing of oil “there is no policy.”
As a result, traders have become seriously concerned about the decrease in supply on the global market. While the US has stated that they will not use the strategic petroleum reserve to increase supply to compensate for the reduction in the production when the sanctions will come into force on 4 November.
Recall that according to our three-part econometric model, the fair rate of the ruble is about 50 to the dollar, and the question of monetary and exchange rate forecast rests now solely in the perception of geopolitics and sanctions on market participants. Oil “all they could” have done for us.
“International financial center”