Russian Urals Oil Approaching $70 a Barrel and the Impact on the Ruble Exchange Rate

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Dnevnik Express

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The price of Russian Urals oil is approaching 70 a barrel and is up almost 30%, and the gap with Brent is below $15 for the first time since March 2022, according to data late last week.

At the end of Friday trading, the growth was 10% compared to the same period in the previous week. The trend has not yet affected the ruble exchange rate, but the income from the sale of energy resources is currently insufficient to support the currency. write in “Commercial”.

At the stock exchange at the end of last week, the dollar rate reached 91.3 rubles, 70 kopecks more than Thursday and 38 kopecks more than the previous Sunday. “Previously, strong price movements in the oil market led to fluctuations in the exchange rate,” the newspaper continued. Two quoted economists expect the ruble to fall to 95 per dollar in the second half of the year.

No expectation of change

The weak reaction of the foreign exchange market, according to “Kommersant”, is connected with the active transition to foreign economic activity in rubles and currencies of “friendly countries” and the intensifying outflow of capital.

The chief analyst of “Sovcombank” Mikhail Vasiliev was quoted, according to whom earlier the growth was provided by financial speculators, including foreign ones, who bought rubles when oil rose in anticipation of increased exports and currency inflows. Now there are no non-residents on the Russian currency market, and the largest Russian banks are under the sanctions of the USA and Europe.

Pressured by inflation, Russia sharply raised interest rates

Prices are rising due to dwindling supply. The newspaper also cited Bloomberg data, according to which for the week ended July 23, oil deliveries from the ports of Primorsk, Ust-Luga and Novorossiysk fell to 1.17 million barrels per day, or 625,000 below the previous Sunday. Abbreviations and Saudi Arabia (1 million per day, announced last month and agreed with Moscow) and the expectation that demand will increase in China due to new measures to stimulate the economy, also confirm the situation in the market.