01.03.2021: Oil growth may be short-lived (Brent, USD/RUB).
Oil bulls have again taken control over the market. The upcoming OPEC+ meeting may cap oil gains. The ruble has accelerated the pace of growth. However, it may enter a correctional phase on March 3. The decision of the members of the alliance will influence oil prices and consequently the ruble
A sell-off wave in global financial markets has calmed down, while the US dollar index is declining again. On Saturday, investors were excited by the news that the US House of Representatives passed a new stimulus package proposed by Joe Biden. The bill will now move to the US Senate for further discussion. Market participants hope that the approval will be ready in the near future as some of the unemployment benefits expire on March 14. This keeps the risk sentiment on.The current situation is favorable for oil, and the bulls have already taken advantage of it. Increased prospects of new stimulus measures for the US economy will help revive fuel demand that suffered from the pandemic restrictions. In the morning session, both oil benchmarks were up by almost 2%. Brent was trading above 65 dollars a barrel, while WTI futures contract with the nearest expiration settled at 62 dollars 50 cents a barrel. On Monday, Brent is expected to stay in the range between 65 and 66.5 dollars a barrel. Positive news from the US offset worries about the upcoming meeting of the OPEC+. However, this factor may come to the forefront at any moment. This is a downside risk for oil, as the members of the alliance are expected to ease the current restrictions on crude production, thus bringing extra supply back into the market. The downbeat data from China was largely ignored by the markets. China’s manufacturing activity has dropped to its lowest levels since May last year. Investors might consider this a short-term decline. The economic statistics were based on the period that included the celebration of the Lunar New Year. Besides, the news about the stimulus package was enough to offset the pessimism from China. This week, traders will focus on the macroeconomic data from the US. Given that the situation in the labor market is currently of high importance for the Federal Reserve, investors will pay attention to the nonfarm payrolls. A positive background suggests a rise in the Russian ruble. Higher oil prices and a moderate recovery in emerging market currencies support the bullish trend. In the early session, the Russian currency has won back some losses from the previous week. As a result, the dollar/ruble pair retreated to the mark of 74.06, having lost 0.7%. Then, the Russian currency may attempt to advance further against the US dollar to the level of 74. The pair is likely to stay trading in the range between 73 and 75. The ruble also gets local support from the remaining sales of the foreign currency by exporting companies, although they might have sold the major volumes on Friday. On Wednesday, local markets will look ahead to the changes in the currency intervention program that should be adjusted amid an 18% increase in oil prices in February. Last month, the ruble posted 1.5% gains. Current fundamental factors support the Russian ruble. The euphoria around the new stimulus package in the US may not last long. Notably, this factor was considered a high inflationary risk last week. Despite the short-term nature of the positive factors and uncertainty over the OPEC+ decision, there are no signs that the ruble will plunge to the level of 80 against the US dollar.
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