Falling Oil Price Drags Rouble Down

Oil prices fell to a five-year low on Monday, sending the rouble tumbling, while fears over slowing manufacturing activity in Europe and China undermined global confidence.

The Russian currency slid more than 6% against the dollar to a new record low.

It was the rouble’s biggest one-day fall since Russia’s 1998 currency crisis.

Brent crude sunk as low as $67.53 a barrel, the cheapest it has been since October 2009.

It later regained some ground to trade at $69.65 a barrel. US crude fell 50 cents to $65.65 a barrel, having hit an intraday low of $63.72 – the lowest since July 2009.

Oil prices have fallen by about a quarter since the summer, while the rouble is down some 40% since January.

The latest falls in the oil price follows Opec’s decision last week not to cut output and leave its production target at 30 million barrels a day.

Amrita Sen, Energy Aspects’ chief oil analyst, said: “The market is still very much in panic mode. Once we get over the panic, Brent prices will probably stabilise at around $65 to $80 a barrel in the short term.”

via BBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza