Oil is rising, but far from Monday’s peak

News of the US boycott of Russian oil pushed crude prices up again, but far from Monday’s highs. Asian stocks rallied slightly

The announcement of the US embargo on Russian oil imports has an impact on Asian markets. Oil prices are up, as are the prices of various metals and commodities, but Asian equities are calm and slightly higher as investors weigh the fallout from the latest developments surrounding the Russian invasion of Ukraine.

In this morning’s trading in Asian markets, a barrel of Brent was trading at $130.48 a barrel. That’s up 2% during trading, but it left the benchmark well off Monday’s high of $139.13. The US West Texas Intermediate crude index traded at $126.44 a barrel, up 2.2%.

A barrel of oil is currently about double what it was trading at its December low. Since then, the escalation has begun: firstly, due to the increase in demand due to the recovery of industries, travel and other activities, thanks to the containment of the covid-19 pandemic; over the past two weeks, because of the Russian invasion of Ukraine and all the fears associated with it.

Yesterday, Russia’s Deputy Prime Minister threatened to cut off all Russian energy supplies to the West, tossing around a scenario in which oil could hit $300 a barrel. Markets are far from these values, and today the rises in Asia were moderate, but there is no reason to calm down: prices will indeed continue to rise, even if the Kremlin’s prophecy does not materialize. not realize.

“The oil shock is by nature a cumulative shock, not a one-time shock and the possibility of the market reaching $150 before returning to $100 is easier for investors to digest,” Stephen Innes, a partner, told Reuters. Director of SPI Asset Management. “Implement sanctions without first developing substitution supply risks [um preço] of Brent crude much higher”.

But oil is not the only raw material to see its prices increase. Nickel prices in China rose 17% to around 42,400 per tonne. The price of gold fell slightly from all-time highs, trading at $2,038.95 per ounce (minus 0.66%). Wheat prices, however, remain just as high – Russia and Ukraine together produce more than a quarter of all the wheat sold globally.

Stock markets are stabilizing

In equity markets, the broader MSCI index, which measures all Asia-Pacific trading outside of Japan, rose 0.80%, led by Australia. China’s CSI300 index rose 0.47% and Tokyo’s Nikkei gained 1.1%.

Wednesday’s gains in Asia marked a reversal after three sessions of heavy losses, which sent the MSCI index down more than 6% to its lowest level since late September.

The European futures market followed Asia’s lead, with the Euro Stoxx 50 up 1.5% and the FTSE 100 up 1.2%.

“Markets remain volatile, unable to have confidence in the implications that the flow of information will have on prices, given the complex state of the global economy,” Rodrigo Catril, senior FX strategist at Reuters, told Reuters. National Australia Bank.

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