The ruble and Russian shares opened with firm gains on Thursday, tracking up the rallying oil price and following signs that a cease-fire is taking hold in eastern Ukraine.

At 08:00 GMT the ruble was 1.1 percent stronger at 60.70 against the dollar, and 1.2 percent stronger against the euro at 68.90.

Earlier on Thursday the ruble reached 68.65 against the euro, its strongest level in 2015, and a seven-week high of 60.38 against the dollar.

The dollar-denominated RTS index of Russian shares was up 3 percent to 991 points, while the ruble-based MICEX index was up 0.4 percent to 1,752 points.

The gains follow a 5 percent surge in the oil price above $60 per barrel late on Wednesday, after comments by the Saudi oil minister about improved oil demand.

On Thursday Brent was down 0.2 percent at about $61.5 per barrel, still holding comfortably above the $60 mark.

“If not now [to buy Russian shares], when?” asked BCS analyst Mark Bradford in a morning note. “The sell-off this week could encourage traders to begin purchases, especially considering that the oil price is above $61 a barrel.”

He added that investors in Russia would also be encouraged by developments in Ukraine, where there are signs that the Minsk peace deal agreed two weeks ago may at last be taking hold.

Ukrainian President Petro Poroshenko is likely to order government forces to start pulling back heavy weapons in the country’s east on Thursday under a Feb. 12 peace deal, a military source said.

Implementation of the Minsk peace deal is an important driver for Russian financial markets as it is likely to determine the future of Western sanctions against Russia.

“OSCE observers are reporting the withdrawal of heavy weapons in the Donbass. The preservation of the cease-fire on the whole in this region, possibly, will restrain the withdrawal of foreigners’ money from Russian assets,” VTB24 analyst Oleg Dushin said in a note.
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