Oil is again falling below the $50 mark whilst Russian currency loses against USD and EUR.
As oil falls yet again to what is considered by analysts as an oversell during the first half of the week, WTI falls to $48.28 a barrel. Last week, oil stocks from Cushing in the U.S rose by 2.2 million barrels but crude inventories fell to 439.4 million barrels. Today, the inventory figures are due from the U.S. Department of Energy's Energy Information Administration with expectations of low reports; just 4.436M against last week’s previous high of 10.303M.
Meantime, the ruble is making losses against the two major currencies of the USD and Euro. Having made gains since the end of January, the ruble has since fallen at a volatile rate. Tuesday saw USDRUB open at 59.67 and Wednesday open at 61.88. The EURRUB told a similar story with open on Tuesday at 64.64 to Wednesday’s opening at 66.19.
After Russia’s three day weekend that took in the celebration of International Women’s Day, the country’s currency that is so dependent on oil prices followed the commodity down. On Friday the Russian central bank has a monetary policy meeting but most analysts agree that the bank will maintain its 15% interest rate.
Last week there was hope that the failing ceasefire in Ukraine - the reason behind European sanctions and subsequent Russian export problems - was being strengthened and may bring peace in the Eastern state. However, Russia has now announced that it will withdraw completely from the Treaty on Conventional Armed Forces in Europe. The treaty was signed in 1990 by sixteen North Atlantic Treaty Organization countries and six Warsaw Pact countries capping the amount of military force and arms that could be stationed in Europe. President Putin asked for revisions to be made to the treaty in 2007, these have not been forthcoming and now Russia will pull out altogether. What effect this decision will have on European policy towards Russia and the confidence that investors have in the country will be found out over the next week.
MT4 Chart: OIL
MT4 Chart: USDRUB
MT4 Chart: EURRUB
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