An unexpected increase in the US crude stockpiles has upset the markets. On Thursday, oil quotes are sliding amid rising trade tensions between the US and China. The situation on the trade negotiations has worsened after Donald Trump signed a bill backing protests in Hong Kong. Data release from the US Energy Information Administration has put pressure on the commodity. Oil quotes were steady in the first minutes of the inventory data release. However, the negative sentiment prevailed, and the prices slumped as crude inventories have been growing for five consecutive weeks. Apart from increased crude and gasoline stocks, the markets were surprised by further increase in hydrocarbon production. Once again, the reading has renewed its historical high. This factor is considered rather negative for the commodity prices, given that demand for oil remains limited.
Brent oil price has been facing a slight correctional decline during the day, but still managed to hold steady at high levels. Currently, the benchmark crude is trading at 63 dollars 55 cents a barrel. West Texas Intermediate has fallen to 57 dollars 84 cents per barrel. Meanwhile, traders continue to monitor the situation around the trade deal which has again become rather unstable. Donald Trump’s decision to support the protesters in Hong Kong will probably have a negative impact on trade negotiations with Beijing. China’s officials have repeatedly expressed their disapproval of the US interfering in the country's internal affairs. However, investor’s negative sentiment can be offset by OPEC’s decision to extend oil output cuts until the middle of the next year. Therefore, Brent oil price should hold at around $64 per barrel.
Growing tensions in the trade dispute between the US and China have affected the risky assets, including the ruble. The dollar/ruble pair has broken the level of 64 and is expected to hold above this mark during today’s trade. The ruble is unlikely to retreat further as it is still supported by high oil prices. As for the internal factors, yesterday's auction on federal loan bonds did not have any significant impact on the Russian currency.
Today, the trade is closed on New York exchange, and Friday is announced a shortened day. This will limit trading activity on the dollar/ruble pair.
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