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USD/RUB: Ruble forecast as natural gas prices tumble

By:
on Jan 6, 2023
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  • The USD/RUB price has been in a slow recovery recently.
  • Natural gas prices have tumbled to the lowest level since 2021.
  • Crude oil prices have also retreated sharply in the past few weeks.

The USD/RUB exchange rate drifted upwards as natural gas prices tumbled. The Russian ruble dropped to a low of 73.40, the lowest level since April 2022. It has crashed by more than  41% from the highest level in 2022.

Natural gas prices are tumbling

The USD/RUB exchange rate had a dramatic performance in 2023 after Russia invaded Ukraine. In the early days, the Russian ruble plunged to a low of 154 against the US dollar. It then staged a major comeback after the actions of the Bank of Russia and the national government. 

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The central bank hiked interest rates to 20% and implemented currency control measures. On the other hand, Putin’s government implemented measures to promote the use of the Russian ruble for its natural gas and oil exports.

The Russian ruble has recently dropped as the natural gas price has pulled back. Gas futures for February deliveries dropped to the lowest level in more than a year. In Europe, the Dutch TTF gas index dropped to 64.20 euros per megawatt hour, the lowest point since November 2021.

European countries are also moving at a faster pace to wean themselves of Russian gas. Germany started receiving LNG tankers from the US and Qatar in a new terminal.

It continued falling after a report by the Energy Information Administration (EIA) said that 221 billion cubic feet of natural gas was drawn from storage facilities in the final week of the year. Natural gas prices have also dropped because of the warmer winter.

Crude oil prices have also dropped in the past few months. After soaring to a high of $137 in 2022, Brent has dropped to $78.61 while the West Texas Intermediate (WTI) dropped to $73.60. This price action has happened at a time when Russia is losing badly in Ukraine.

Analysts believe that the Russian ruble will likely have a brutal performance in 2023 as conditions in the country worsen.

USD/RUB forecast

USD/RUB
USD/RUB chart by TradingView

The four-hour chart shows that the USD to RUB exchange rate has been in a slow bullish trend in the past few days. As it rose, it moved above the upper side of the triangle pattern shown in yellow. It has also moved slightly above the 25-day and 50-day moving averages while the MACD has moved to the neutral point.

Therefore, the pair will likely continue rising as buyers target the next key resistance point at 80. A drop below the support at 68 will invalidate the bullish view.