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Oil prices recover slightly; ruble hits new lows

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(GlobalPost/GlobalPost)

Oil prices rebounded slightly on Wednesday after another slump, while the Russian ruble hit all-time lows against the dollar and euro.

Investors were awaiting Britain's budget update that is taking on extra significance ahead the country's general election due next May, as well as keeping an eye on the European Central Bank before its latest policy meeting due Thursday.

On crude oil markets, US benchmark West Texas Intermediate (WTI) for delivery in January rose 37 cents to $67.25 a barrel.

Brent North Sea crude for January gained 16 cents to stand at $70.70 in London midday deals.

Oil prices had tumbled by about two dollars on Tuesday after Iraq announced plans to boost the country's crude oil exports after striking a deal with the autonomous Kurdish region.

The decline compounded the hammering taken by oil prices late last week after the Organization of Petroleum Exporting Countries left its output ceiling unchanged, despite the supply glut that has been driving prices sharply lower since June.

"We are seeing some consolidation in the market at the moment," Daniel Ang, investment analyst at Phillip Futures in Singapore, told AFP.

"We are likely to see such ups and downs for the rest of the year as the crude market finds a good price to stabilise upon after recent losses," he added.

- Ruble rocked -

In foreign exchange Wednesday, Russia's currency hit a record low of 54.82 rubles to the dollar and all-time trough of 67.82 against the euro.

The ruble, hit by Western sanctions against Russia over the crisis in Ukraine and plunging oil prices, suffered on Monday its worst one-day drop since Russia's debt meltdown in 1998.

The further drop in the price of oil in recent days -- to five-year lows -- has a major impact on the Russian economy as oil and gas exports are a main source of revenue for the federal budget, and has helped push the ruble down sharply.

Many analysts increasingly fret over the country's economic outlook and the authorities' apparent reluctance to change tack over the Ukraine crisis as the economy heads into recession.

"The ruble continues to remain under significant downward pressure in the near-term weakening at its fast rate since the Russian financial crisis in 1998," said Bank of Tokyo-Mitsubishi analyst Lee Hardman.

Elsewhere Wednesday, the euro fell to a 15-month low point at $1.2323. The dollar was strong also against the Japanese unit, reaching a seven-year high of 119.48 yen.

"The US dollar has derived support this week from less dovish than expected rhetoric from Fed officials who do not yet appear overly concerned by the increased downside risks to inflation from lower commodity prices and falling inflation expectations," said Hardman.

In stock market trade, London's benchmark FTSE 100 index fell 0.15 percent to stand at 6,732 points around midday in the British capital.

Frankfurt's DAX 30 rose 0.20 percent to 9,953.91 points and the CAC 40 in Paris dipped 0.05 percent to 4,386.02 compared with Tuesday's close.

On the London Bullion Market, gold rose to $1,203.25 an ounce from $1,197 on Tuesday.

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