The Oil prices soared on Friday as Wall Street indices accelerated their decline when the risk of an invasion of Ukraine by Russia intensifies, according to the White House.
The price of a barrel of Brent from the North Sea —which Ancap uses as a reference— for delivery in April increased 3.31% to US$94.44, its highest price since September 2014. So far this year, the rise is almost 22%. In New York, a barrel of West Texas Intermediate (WTI) for March delivery rose 3.58% to $93.10, also the highest level in 7 years.
“There is a lot of nervousness in the stock market,” said Peter Cardillo of Spartan Capital.
“If they invade, obviously that will put stocks under pressure,” the analyst explained. “That means that prices are going to rise,” mainly energy and raw materials, and that “disposable income is going to decrease,” warned the expert.
White House National Security Adviser Jake Sullivan warned Friday that an invasion of Ukraine could take place during the Beijing Olympics and called on Americans to leave the country within “24 to 48 hours.”
For its part, the United Kingdom on Friday also advised its citizens in Ukraine to leave that country immediately for their safety.
Nervousness
The oil market is “very nervous,” said Andy Lipow of Lipow Oil Associates. Western leaders threatened “swift and drastic” sanctions against Moscow in the event of an invasion, initially targeting the financial and energy sectors.
Russia is a crucial supplier to Europe and particularly to Germany.
“Under these circumstances the oil market does not want to be caught off guard over the weekend and is concerned that an invasion by Russia could trigger sanctions which, added to the invasion, could lead to supply disruptions,” Lipow added.
wall street down
Fears of an imminent Russian invasion of Ukraine put pressure on the New York stock market, already feverish and searching for direction, on Friday.
The Dow Jones lost 1.43%at 34,738.06 points, the index nasdaqwith a strong predominance of technology companies, gave up a 2.78% at 13,791.15 points, and the indicator cS&P 500 composite fell 1.9% at 4,418.64 points.
The session had begun without conviction. Traders had expected a rebound after the heavy blow from US inflation data on Thursday, and after learning of a hardline stance from a Federal Reserve (Fed) member.
“The news from Ukraine and Russia dealt a further blow to already faltering markets,” said Cliff Hodge, chief investment officer at Cornerstone Health. “The flight to safer values began.”
“If there were to be an invasion … it’s conceivable that stocks will see a further low of around 10%,” said John Lynch, chief investment officer at Comerica Wealth Management.
(Source: AFP)
