17.12.2018: Oil inches up in quiet trading
Today crude oil is trading sideways. Market participants are worried despite a weekly update from Baker Hughes released on Friday.
According to Baker Hughes energy services firm, US drillers cut four oil rigs last week, pulling the total count to the lowest since mid-October at 873. The data points to a near-term slowdown in the US oil production. However, investors doubt it.
West Texas Intermediate has gained over 1% since Friday, trading today at near 51 US dollars a barrel. Brent crude international grade still cannot develop a rally, trading at the level of 60 – 60.5 US dollars a barrel. Experts say investors are still speculating on the efficiency of the deal on oil production cuts from January 2019, made by OPEC and its allies.
Thus, investors are in the cautious mood.
Today, the Russian ruble is asserting its strength against its American counterpart. The dollar/ruble pair opened the trade at the Moscow Exchange with a decline, heading for Friday’s low of 66.20. Analysts believe the pair could reach this level by the end of the global trading day.
A tax filing period kicked off in Russia, thus providing the ruble with support. On Friday, the Bank of Russia unexpectedly decided to raise the key interest rate to 7.75%.
The central bank unveiled its readiness to resume the program of asset purchases from mid-January 2019. This factor weighed down on the ruble on Friday.
However, the situation has changed since the start of the trading week.
As the ruble finds solid support, the Fed’s policy meeting could trigger just minor corrections of the dollar/ruble pair.
Experts do not foresee big changes in the oil market.
Crude oil is likely to trade without higher volatility. As a commodity currency, the Russian ruble is going to show resilience to the US dollar even after the Fed’s policy meeting.