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Crude oil prices rise above $97 as Vladimir Putin sends troops into Ukraine

Oil prices rose and inventories fell after Russian President Vladimir Putin sent troops into Ukraine, placing his country at war and thwarting efforts to find a diplomatic solution to the crisis.

Brent crude, the international oil benchmark, rose 2.4% to $97.66 a barrel, a seven-year high, while West Texas Intermediate, the U.S. marker, rose 4.5% to 95, 19 USD.

On the stock market, Hong Kong’s benchmark Hang Seng index fell 2.2%, while Japan’s Topix 300 index and the CSI 300 of Shanghai- and Shenzhen-listed stocks both fell 1.7%. .

“In the short term, we are simply in the headlines business,” said Robert Rennie, head of global market strategy at Sydney-based Westpac. “It’s clear that the headlines have taken a very ominous turn in the last few hours.”

Futures show a pullback for Wall Street as US markets bounce back from the holiday break, with the S&P 500 down 1.7% and the tech-focused Nasdaq expected to drop 2. ,3%.

In sovereign debt markets, bond yields fell as investors sought safety from falling stock prices, with yields on 10-year US Treasuries falling 0.07 percentage points in level 1.862%.

The moves in global markets also come after Moscow announced it had destroyed Ukrainian military vehicles entering Russian territory and Putin agrees to recognize two Moscow-backed breakaway regions in eastern Ukraine.

US Secretary of State Antony Blinken said Putin’s decision to recognize Russian-backed forces Donetsk and Luhansk The independent people’s republic is a “clear attack” on Ukraine’s sovereignty. A senior US official on Monday warned that an invasion of Ukraine could be underway as early as “in the coming hours”.

The UK is expected to announce sanctions against Russia on Tuesday. Foreign Minister Liz Truss said the measures would be taken in response to Moscow’s “violations of international law and attacks on Ukraine’s sovereignty and territorial integrity”.

The crisis in Ukraine has fixed volatility in global markets in recent weeks, raising energy prices due to concerns that supply chains could be severely disrupted in the event of a conflict. Analysts at JPMorgan estimate oil prices could hit $120 a barrel in the coming weeks if the crisis in Ukraine worsens.

Conflict also sent Russian stocks plunge. The country’s benchmark Moex index fell 10.5% on Monday, its biggest one-day drop since Russia seized Crimea in 2014.

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