Oil prices have been rather stable, hovering roughly at the same level so far this year. However, there are some signs that markets will face a sharp movement.

Hedge funds have increased their long positions in oil futures, betting that oil prices would continue rising. The rise is likely to take place, but it is seen to be short-lived. In this scenario, purchases will be conducted in the Russian ruble.

Russia's Finance Ministry said earlier that it plans to expand its currency purchases in case oil prices increase or the ruble’s exchange rate rises, depending on the degree of the strengthening. Thus, if oil prices rise, and the ruble strengthens, there should be no budget problems. However, the ministry of agriculture and the ministry of industry are likely to say that the strong ruble is damaging to the Russian economy.

The bottom line is that the stronger ruble affects Russian exports of agricultural products. But looking at the tough enough stance of the Russian central bank, the ruble is expected to be weighed down by the market factors and will not be able to appreciate.

Perhaps, a rise in oil prices will be short-run, so the speculators will close their ruble positions and the ruble assets. Thus, there is a faint possibility that the ruble will hit record highs in the near future.