The oil will help the recovery of the Russian stock market

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Oil develops the rally, updating the highs from late 2014 that was the main theme in the markets. Saudi Arabia’s statements that the country would like to see oil at $ 80-100 per barrel, helped oil Wednesday to add another $ 2 (3%), raising the rate of Brent to $73.40. Comments Saudi Arabia was regarded by the market as a hint of willingness to maintain the restrictions in production despite the fact that the oil reserves in the vaults are now close to the average values in 5 years.
The Saudis are easy to understand, they have several years of intend to sell stake in its mining giant Saudi Aramco, tuning in to the biggest IPO in history, and higher prices of oil are very beneficial to the interest of the company and the opportunity to get more money for 5% stake.
The tactic of “getting your price” before the sale can become a time bomb, as after the sale of the shares of the company, Saudi Arabia may well come back to strategy 2014 when did not take on the role of a balancer offers.
The oil market yesterday, the market helped the new portion of data on U.S. inventories. They declined 1 million barrels, 19.7% below levels last year, despite production growth of up to 10.54 million barrels per day (+14% yoy).
The rising oil prices is a tailwind for Russian companies the ruble. The Russian currency managed by oil to repel 71 and 85 cents of the dollar and the Euro and to close at the end of the day is below recent support levels. USDRUB dropped to 60.85 and EURRUB up to 75.28.
Shares of Russian companies yesterday did not have time to connect to the rally, held after the closing of the main trading session, so this morning, created a positive background for the opening of the Russian trading. Night rise of oil prices can help the Russian market to win back some of the positions lost in the beginning of last week, after rising 2.5%-2.9% Wednesday.
The strengthening of the national currency is often a limiting factor for growth of quotations of exporters. But this time it is more likely that the dynamics of the stock market will be stronger as the dollar and the Euro against the ruble are near important support levels for those who prefer a buy on dips.
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Alexander Kuptsikevich,
Financial analyst,
FxPro