OPEC has helped the ruble, its further growth is not obvious

ОПЕК помогла рублю, дальнейший его рост неочевиден

The rouble received support from OPEC’s decision to cut oil production, however, further growth of the Russian currency is not obvious – polled by RIA Novosti analysts differ in opinion about the prospects of the course before the end of the year.

Among the pitfalls for the ruble in December, experts called traditional for this period, the growth of liquidity, a tightening of monetary policy of the fed and geopolitical risks in connection with the forthcoming Italian referendum on constitutional reform.

Representatives of OPEC countries reached Wednesday an agreement on the reduction from 1 January 2017 oil production by 1.2 million barrels per day — up to 32.5 million. The agreement calls for production cuts by countries outside the organization of 600 thousand barrels per day. Russia agreed to cut production by 300 thousand barrels a day.

Against this background, the price of oil jumped more than 10% and has already secured about 54 dollars per barrel for Brent.

The dollar calculations “tomorrow” to 18.50 Moscow time have decreased on 0,34 ruble — to 63.8 of the ruble, the Euro rate by 0.36 rubles — up to 67,63 of the ruble, follows from the data of the Moscow exchange.

Optimistic expectations

In the short term there are opportunities for further growth in oil prices and the strengthening of the ruble, said Tom Levinson from the company “Sberbank CIB”.

“As a result, the Russian currency is supported until the end of the year: it is possible that the USD/RUB will test recorded since the beginning of the year low around 62. The key factor here might be the growth in price of Brent crude important level of resistance in the range of 53.7-54.3 per dollar per barrel,” he said.

The success of the November summit of OPEC in Vienna will provide oil quotations strong support in the medium term and will not fall below $ 50 per barrel, said Anastasia Sosnova from the Bank “Russian capital”.

“In addition, the idea of reducing the production of countries outside OPEC, the price of Brent crude may rise to $ 55 and above. Accordingly, the ruble will get a chance to strengthen. However, a number of factors, apparently, will prevent the dollar’s decline below a critical level close to 62 rubles,” — she added.

Realists and pessimists

“OPEC’s decision coincided with our expectations, which caused a rise in oil prices, which will be around 50+ dollars before the end of the year,” says economist for Russia and CIS, Citi Bank Ekaterina Vlasova.

“This helped the ruble to overcome the negative due to a decline in risk appetite in global markets after the US presidential elections. However, the ruble reacted with restraint to the rise in oil prices and the ruble price of the black gold jumped 3.4 thousand rubles, which is positive for the Russian budget. Until the end of the dollar expected in the current range 63-64 of the ruble,” she added.

Strong growth of oil should be expected, in the absence of physical growth of energy consumption due to seasonality, the price of oil will remain in the range of 50-55 dollars per barrel, he praised the chief expert of center for economic forecasting of Gazprombank Yegor Susin.

“Probable increase before year-end bets the U.S. Federal reserve and the oil companies hedge their risks by selling oil futures at current high levels will put pressure on their price. The difference in rates of oil futures for the next months has been reduced because of this”, — explained his position, he.

As for the ruble, that is, local factors of pressure on him in the form traditional for the end of the year growth of ruble liquidity, and the Central Bank will not be able to absorb all the excess rubles, says Susin.

Among external factors, the expert highlighted the geopolitical risks in view of the forthcoming Italian referendum on constitutional reform, which threatens to risky assets problems similar to Brexit.

“It turns out that the dollar exchange rate, adequate to current oil prices is in the range of 60 to 62 of the ruble. But in the end we have about 64 rubles, and by the end of the year for the ruble is dominated by downside risks – in the area of 65-67 against dollar”, — said Cousin.