25.02.2021: RUB lacks drivers to move higher (Brent, USD/RUB).
Bearish data on oil inventories did not dampen market enthusiasm. Investors are encouraged by the vaccine rollout and the expected recovery in fuel demand. Oil continues to test new highs. The ruble also rises supported by oil’s rally and the positive dynamics in emerging market currencies. The official data from the US Energy Department confirmed the report from the API. Oil stockpiles in the US increased for the previous week while markets expected to see a decline. This signals weaker demand for crude oil as refineries in the US have been affected by the abnormally cold weather. Experts fear that the gap between crude refining levels and the levels of supply will grow which will put pressure on oil prices. However, market participants have downplayed this factor and focused on positive news instead. It is reported that the situation around pandemic has been improving. The increasing availability of the Covid-19 vaccine enables the US to ease quarantine restrictions. Besides, the oil demand started to recover as well. Thus, the increased traffic in India helped return the demand to pre-pandemic levels, while fuel consumption in China has also improved. In Europe, fuel demand is expected to rise by 60,000 barrels per day in February. On Thursday, oil continues to extend gains. Brent oil futures for April are steadily holding above the level of 66 dollars a barrel. These are the highest levels since January last year. WTI futures contract with the nearest expiration was trading above 63 dollars a barrel, its highest level since January 6, 2021. Today, oil buyers may try to reach the level of 67 dollars a barrel. Meanwhile, experts insist that a downward correction is inevitable since the current prices seem excessively high. At the upcoming meeting in March, the OPEC+ members will reportedly ease the output curbs from April. This is how they plan to cap the prices, otherwise the energy market will face a booming shale oil production in the US. The global market sentiment is moderately positive. The overall background confirms that the risk appetite will remain high. Yesterday, major US stock indices closed in green after the speech of Fed’s Chair Jerome Powell. He announced that the regulator will keep its monetary policy unchanged and will focus on supporting the economy and the labor market. The ruble showed good results and opened today's session with gains. It receives support mainly from the strong foreign market and high oil prices. Additionally, the easing of the sanctions rhetoric and the demand for federal loan bonds back up the ruble. Besides, tax payments in February contribute to the ruble’s growth. However, the exporting companies could have used large volumes of foreign currency earlier this month, so this factor may be of minor support. The dollar/ruble pair is moving closer to a strong level of support at 73.00. At this point, we can see either a breakout or a trend reversal which is more likely. Usually, the ruble begins to lose ground when approaching this mark. Traders may well test this level with a possible breakout. This scenario will be relevant only in the short term. The chances for the ruble to settle below the level of 73 and move further are very low. In the course of today's session, the dollar/ruble pair is expected to decline to the range of 73 and 73.20. Another downside risk for the ruble may be the escalation of tensions between Russia and Saudi Arabia. The two oil producers disagree on how to regulate the oil market. The OPEC+ meeting is scheduled for next week.
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