Russia's economy contracted by less than expected in the first quarter of 2016 in a sign it may be stabilizing.

The Russian state statistics service said on May 16 that the economy declined by 1.2 percent from a year earlier, after falling by 3.8 percent in the final quarter of 2015.

Russia's economy has been in a deep recession since 2014 due to a collapse in oil prices and Western sanctions imposed because of Moscow's aggressions in Ukraine.

But now with oil prices at their highest level in more than six months, near $49 a barrel in London trading, and the ruble up by 13 percent against the U.S. dollar so far this year, analysts say the worst seems to be over.

"The acute phase of the crisis is now over," said Liza Ermolenko, analyst at London's Capital Economic consultancy.

"The annual growth rate could return to positive territory towards the end of the year.... Even so, given the numerous headwinds facing the Russian economy, we still expect the recovery to be disappointingly weak."

Based on reporting by Bloomberg and AFP