By Denis Maternovsky

May 4 (Bloomberg) -- The ruble headed for its weakest level in almost a month against the dollar as oil, Russia’s main export earner, fell below $86 a barrel.

The currency depreciated 0.6 percent to 29.3600 versus the dollar at 12:57 p.m. in Moscow. It closed at 29.1825 on the last day of official trading before the Labor Day holiday yesterday.

Crude for June delivery dropped as much as 1 percent to $85.35 in New York, falling for the first day in five, on speculation U.S. crude supplies increased last week and as economists said the European Central Bank may have to consider additional steps to prevent Greece from bringing down the euro.

Investors increased bets that the ruble will weaken further, with non-deliverable forwards showing the currency at 29.6025 per dollar in three months compared with an NDF of 29.4900 on April 30. The contracts are a guide to expectations of currency movements as they allow foreign investors and companies to fix the exchange rate at a particular level in the future.

The ruble added 0.9 percent to 38.5650 per euro. The movements against the dollar and the euro left the ruble at 33.4980 against the central bank’s target currency basket, which is used to manage swings that hurt Russian exporters.

The basket is calculated by multiplying the dollar’s rate to the ruble by 0.55, the euro to ruble rate by 0.45, then adding them together. The ruble remains within the 26 to 41 band the central bank pledged January 2009 to defend.

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