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. Last Updated: 07/27/2016

Oil Rebound Sends the RTS Past 1600

Following a rise in oil prices, the RTS ended the week above 1600 for the first time since Sept. 6.

Some analysts said a steady decline oil prices since July had finally come to an end.

The RTS closed at 1610, gaining 3.6 percent over the week, even as Nymex crude prices rose to $58.57 on news of record oil consumption in the United States.

"I think now we are witnessing a little bit of a change in the sentiment," said Vadim Mitroshin, an oil and gas analyst at Credit Suisse.

"The overall environment for oil prices should be a little more positive," he said.

On Friday, Norway shut down oil platforms run by Statoil and Shell for having unreliable lifeboats, a move that cut the country's crude production by 10 percent, driving up prices for Brent and other blends.

Also on Friday, the U.S. Department of Energy reported high consumption of fuel.

LUKoil (LKOH) shares ended the week at $77.90, up 5.3 percent; TNK-BP (TNBP) closed at $2.35, up 0.2 percent; and Tatneft (TATN) closed at $4.70, up 11.1 percent.

Al Breach, chief strategist at UBS in Moscow, said the country's top integrated oil producers were valued attractively.

"These companies look cheap, assuming that oil is at least $40 or more in the long term," Breach said. "If we get a clear sense that the oil price has bottomed, then the market will trade up.

Surgutneftegaz (SNGS) ordinary shares rose 1.2 percent to close at $1.295.

Top performers last week included supermarket giant Sedmoi Kontinent (SCON), which gained 13.6 percent to close at $25; metals powerhouse Norilsk Nickel (GMKN), which gained 10.9 percent to close at $140; and state pipeline monopoly Transneft (TRNFP) preferred shares, which rose 3 percent to close at $2,210.

In a Friday report, Breach identified Transneft as the key stock in one of four "natural monopoly" industries that should benefit from liberalization and privatization. Other industries highlighted in the report are gas, electricity and wire-line telecommunications.

"These are the sectors where you've got more upside than in the market in general," he said.

Interfax reported earlier in the week that the government, which controls all of Transeft's voting shares, might institute a "pump or pay" system that would penalize oil producers that reserve capacity on the pipelines but fail to cough up the oil.

Trading in Transneft's preferred shares -- the only ones in private hands -- was suspended from May to September.

But the stock has risen 33 percent since Sept. 25.

Valery Nesterov, an analyst at Troika Dialog, has a target price of $3,010 on Transneft, 36 percent above the current price.