Russia ETF Soars as Oil Above $37 Per Barrel Improves Outlook

  • Oil has widened its advance from 2015 low in December to 4.7%
  • Former finance minister Kudrin may return in senior position

The largest exchange-trade fund tracking Russian stocks gained for the first time in three days after oil rose above $37 per barrel, making the energy-heavy fund more appealing to investors.

The Market Vectors Russia ETF rose 2.7 percent to $14.87 in New York as trading volume was about 80 percent of the 90-day average. The dollar-denominated RTS Index advanced in Moscow, while its futures gained for a second consecutive day.

The ruble strengthened and oil, the nation’s main export, rose 3.2 percent to erase Monday’s losses. A Bloomberg survey showed U.S. crude stockpiles probably fell for a second week, dimming concern over a supply glut. Separately, former Finance Minister and investor favorite Alexei Kudrin is in talks to get a senior government job to address Russia’s economic woes.

“Even if oil won’t rally back to $50 per barrel any time soon, there is some optimism that oil might be finding its bottom at current levels, and this optimism helped the Russian market advance,” Aleksei Belkin, chief investment officer at Kapital Asset Management LLC, said by phone from Moscow on Tuesday.

Brent advanced to $37.79 per barrel, widening its gain from this year’s low in December to 4.7 percent. The low cost of oil, compared to a $100 average last year, is straining state coffers and posing a risk for the nation’s budget, Economy Minister Alexei Ulyukaev told Russia 24 television on Tuesday.

The ruble gained less than 0.1 percent to 72.2050 against the dollar. The RTS Index gained 1.8 percent to 769.64. Futures contracts on the RTS Index expiring in March rose 0.1 percent to 77,250 in U.S. hours.

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