Oil remains under pressure amid unexpected rise in the US crude inventories. However, bullish sentiment prevails in the market. The ruble is also gaining ground despite rising concerns over economic slowdown in the country. Oil has lost 50 cents in response to the official data from the US Department of Energy.
US crude stockpiles rose much higher than forecasted by the Energy Information Administration on Wednesday. Last week, crude inventories increased by 7.9 million barrels, while analysts expected a rise of 2.7 million barrels. A report from Bloomberg has damped the spirits of oil buyers. According to Bloomberg, the OPEC+ members are likely to bypass the topic of additional cuts in oil output during December meeting. It is believed that in the upcoming meeting, the cartel will urge its members to better fulfill their obligations under existing agreement.
Oil started today’s session with a slight decline but steadily trading in a narrow range. The Brent was estimated at 61 dollars 78 cents a barrel early in the morning. Despite an existing downward trend, oil prices face a strong bullish momentum which can be explained by hopes for an interim trade agreement between Beijing and Washington. Moreover, market participants may expect Saudi Arabia to push on its OPEC colleagues and insist on reducing oil production. The kingdom needs to get a good deal on its oil company Aramco that has recently launched an initial public offering.
The signing of the phase-one trade deal between the US and China may be delayed until December. According to Donald Trump, the two parties continue to discuss the venue for the official meeting. However, the leaders managed to agree on a more important issue - the gradual reduction of tariffs, Chinese representatives announced today. In case the White House confirms this information, it may signal the end of the trade war, which continues to cast a shadow over the global economy.
Investors were optimistic about the news and showed a growing appetite for risks which supported the ruble. Against the US dollar, the Russian currency advanced to the level of 63.71. Meanwhile, some internal factors are weighing down on the ruble. For instance, the head of the Bank of Russia Elvira Nabiullina made a rather alarming statement about the prospects of the country's economy. The GDP growth was slower than expected due to a combination of negative internal and external factors.
The dollar/ruble pair is expected to hold near the level of 63. The ruble is likely to retreat to the mark of 64 in case negative factors continue to push further.
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