Ukraine: oil and gold still blaze, Asian stock markets plunge

Posted 07 March, 2022

Oil prices continued to soar on Monday, as did the price of gold which briefly exceeded $2,000 an ounce, while Asian stock markets tumbled in the face of the repercussions of the Russian-Ukrainian war on the world economy.

The price of a barrel of Brent from the North Sea came close to 140 dollars on Sunday around 23:00 GMT, close to its all-time high of 147.50 dollars reached in July 2008.

The prices of black gold then fell, before rising at a frantic pace: after 06:20 GMT the barrel of American WTI jumped 9.04% to 126.14 dollars and that of the barrel of Brent from the North Sea s flew 10.12% to 130.06 dollars.

In the face of the worsening war in Ukraine, direct sanctions against Moscow's hydrocarbon exports are no longer a taboo concept.

US Foreign Minister Antony Blinken said on Sunday that the United States and the European Union were "very actively" discussing the possibility of banning imports of Russian oil.

Europeans are more cautious, however, as some states in the region such as Germany are highly dependent on Russian oil and gas.

But even if the black gold of Moscow is not directly sanctioned for the moment, in theory, it already finds almost no buyer, which seriously disturbs the world supply.

"Barring an end to hostilities, there is little on the horizon to slow" the rise in oil prices, according to a National Australia Banknote released Monday.



The euro falls


The third round of talks between Ukraine and Russia is scheduled for Monday, but markets are not expecting a favorable outcome after previous talks failed and the Russian offensive intensified.

However, the Russian army announced on Monday, ahead of these new discussions, the opening of several humanitarian corridors and the establishment of local ceasefires to evacuate civilians from the Ukrainian cities of Kharkhiv, Kiev, Mariupol, and Sumy, plagued by fierce fighting.

An escalation of the conflict in Ukraine would have "devastating" economic consequences worldwide, the International Monetary Fund (IMF) warned on Saturday.

Besides the conflict itself, the sanctions imposed on Russia "will also have a substantial impact on the world economy and financial markets, with collateral effects for other countries", according to the IMF.

Investors rushed to gold, a safe haven par excellence, which exceeded 2,000 dollars an ounce in Asian exchanges on Monday morning, a first since August 2020. The ounce had returned to around 1,983 dollars around 06:40 GMT.

Conversely, the equity markets were drinking: on the Tokyo Stock Exchange, the flagship Nikkei index closed down 2.94% to 25,221.41 points, its lowest level since November 2020.

All sectors of activity on the Nikkei were flattened, with the exception, unsurprisingly, of energy.

Losses on the Hong Kong Stock Exchange were even worse, with its Hang Seng index dropping around 3.5% around 06:30 GMT. In mainland China, Shanghai and Shenzhen lost more than 2%.

On the currency market, the euro fell sharply against the dollar, falling to 1.0880 dollars around 06:30 GMT against 1.0928 dollars on Friday.

The European currency also fell against the yen, at the rate of one euro for 125.08 yen against 125.48 yen on Friday at 9:00 p.m. GMT.

The dollar progressed against the yen, at the rate of one dollar for 114.96 yen against 114.82 yen at the end of last week.

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07 March, 2022 08:21

← Yesterday on Wall Street

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Yesterday on Wall Street

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