MOSCOW, January 13. /TASS/. The US dollar rose by 2.03 rubles on the Moscow Exchange on Tuesday from Monday’s close to 65.2 while the euro increased by 2.58 rubles to 77.26, hitting their highs since December 2014.
The ruble is falling amid the continued decrease in world oil prices.
The price of Brent crude fell by 4.3% on the Intercontinental Exchange (ICE) in London on Tuesday to $45.39 per barrel while WTI dropped by 3.39% to $44.52 per barrel by 07:50 GMT, hitting their lows since the spring of 2009.
The world prices of oil, a major Russian export commodity, remain a dominant factor exerting pressure on the ruble, ING Bank Chief Economist for Russia and Kazakhstan Dmitry Polevoy said. “The forthcoming tax period can lend only some support to the ruble; however, the ruble is likely to continue weakening further, unless oil prices recover,” the expert said. “The ruble’s fall can only be restrained by the mandatory sale of foreign currency by state companies, which are under close control of financial authorities,” he added.
Only a contraction in supply on the oil market can help oil prices recover, Sloth Hansen, head of commodity strategy at Saxo Bank, said.
The number of operating oil rigs has dwindled by 8% in the United States and more than twofold in Canada since October 2014 and this factor may slow down the oil price decline soon, he said.
However, a risk still exists for oil prices to plunge to their lows registered in 2008 when Brent crude fell below $40 per barrel, he said.
At the same time, investors’ current interest in the purchase of call options for WTI futures for June delivery at $65 and $70 per barrel (the buyer of the call option derives profit when the price of an underlying asset goes up in the future) is a positive factor that may indicate that oil prices will recover after some time, Hansen said.