27.03.2020: Traders tend to take immediate profit (Brent, USD|RUB)

On Friday, oil prices are on track to recovery, but this may turn to be a short-term trend. Despite the positive dynamics in the morning trade, oil is very likely to close in the red for the fifth consecutive week. The ruble remains at risk of falling lower as traders prefer to take profit after the ruble’s rise at the beginning of the week. The Russian currency has already gained 3%.
In the early session, oil was trading moderately higher, but given the current negative background, crude prices are unlikely to hold in the positive territory. Brent quotes once again dropped below 26 US dollars per barrel, while West Texas Intermediate crude was trading at 22 US dollars 74 cents a barrel. Oil prices plummeted by almost 60% since the beginning of the year due to the coronavirus outbreak and oil price war between Moscow and Riyadh. Analysts expect WTI to plunge to as low as 15 US dollars per barrel in the late June unless the markets stabilize.
World leaders at the G-20 video conference summit held on Thursday committed to inject over 5 trillion US dollars into the global economy to counteract the impacts of coronavirus pandemic.
However, the automobile traffic in the US is expected to decline by more than 80% in the near future, leading to a shrinking energy demand. In April, markets will probably see the steepest drop in oil demand. Even if Russia and Saudi Arabia manage to strike a deal on oil production, this will not help improve the situation.
According to Goldman Sachs, the daily oil consumption may contract by more than 17 million barrels. In May, however, the energy demand should slightly recover, so crude prices are likely to edge up.
The ruble was advancing moderately against the US dollar in the previous session. On foreign exchange, the dollar was losing ground amid the collapse in the US labour market. The greenback displayed overall weakness, especially after the US Federal Reserve said it was ready to fill the market with liquidity. In this case, the ruble may largely benefit against its American counterpart.
Yesterday, the Russian currency managed to reach the level of 77 against the US dollar, but it is unlikely to hold there for long. For the ruble, the downward pressure will persist. On Friday, the dollar/ruble pair is trading mixed with the greenback moving slightly higher in the morning session. In the mid-term, the Russian currency is seen trading in the range between 75.0 and 70.0 provided that oil prices remain stable. Meanwhile, Brent quotes are holding at 26 - 28 US dollars per barrel.
On the hourly chart, the triangle pattern is being formed, and the price may go beyond it at any time. There are no obvious reason for a breakout for now.
Besides, market participants expect another round of oil sell-off which may bring the ruble down to the level of 80 against the US dollar.
At the close of the session, the Russian market may dip lower as investors are reluctant to leave risky positions open for the long weekend. Next week, the Russian financial markets will be closed due to the national lockdown.



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