Fears of war between Russia and Ukraine lead to higher oil prices and jolt inventories

  • US stock indices in the red, with Nasdaq leading the declines
  • The Euro Stoxx 600 Index stabilized after hitting its lowest level since July 21
  • Crude oil futures hit their highest level since 2014
  • The US dollar in a little red, the ruble lost strength

NEW YORK (Reuters) – Crude oil futures rose on Monday to their highest since 2014 on supply concerns, while Wall Street stocks fell a day after Russian President Vladimir Putin ordered troops into Ukraine’s Donetsk and Luhansk regions.

As investors braced for volatility as they monitor international reactions and Putin’s next move, the safe-haven US dollar lost some ground and European stocks turned positive, while US Treasury yields rose after the Kremlin said it remained open to diplomacy. Read more

European countries have begun to announce sanctions against Russia, with German Chancellor Olaf Schulz warning that the Nord Stream 2 gas pipeline will now be denied certification to start-up and Britain taking action against Russian banks. US President Joe Biden is scheduled to make statements about the situation at 1300 (1800 GMT). Read more

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European STOXX 600 Index (.stoxx) It was basically flat after dropping below 2% earlier in the day and losing 1.3% on Monday when US markets were closed for a holiday.

“The bottom line is that the fear factor remains high, and until we get a clearer picture of what Putin may or may not do, the market will remain in a state of confusion,” said Peter Cardillo, chief market economist. At Spartan Capital Securities in New York.

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Rising oil prices have added to the uncertainty as investors fear the implications of the Federal Reserve’s policy changes aimed at combating high inflation.

“If oil prices continue to rise and go above $100 and stay there for a long period of time, that means you will have higher inflation,” he said.

Brent crude was at $97.03 a barrel, up 1.72% on the day, after earlier exceeding $99, the highest since September 2014, reflecting fears that Russia’s energy exports could be disrupted by any conflict. US West Texas Intermediate crude rose 2.04% to $92.93 a barrel, after hitting $96 earlier, its highest level since August 2014.

A chart of the German DAX stock price index is photographed at the Frankfurt Stock Exchange, Germany, February 16, 2022. REUTERS/Staff

Dow Jones Industrial Average (.DJI) The S&P 500 index fell 270.99 points, or 0.8 percent, to 33808.19 points (.SPX) It lost 23.46 points, or 0.54%, to 4,325.41 points, and the Nasdaq Composite (nineteenth) It fell 128.84 points, or 0.95%, to 13,419.23 points.

MSCI World Stock Index (.MIWD00000PUS)which measures stocks in 50 countries, was last down 0.6% after earlier dropping 0.8%, and the index was at levels not seen since Jan. 28.

MSCI’s broadest index of Asia Pacific shares outside Japan (MIAPJ0000PUS.) It closed down 1.4%.

And the spot gold price fell for the last time 0.2 percent, after it rose earlier to 1913.89 dollars, its highest level since June. Read more

The strong rally in US Treasuries, spurred by an initial offer of safe-haven assets after Russia ordered troops into breakaway parts of eastern Ukraine, was reversed as investors took a more cautious approach to assessing further developments.

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The yield on the 10-year US Treasury rose 2.1 basis points to 1.951%, after an early morning price jump drove yields below 1.85% at one point. Yields move in the opposite direction to bond prices.

The dollar index was down 0.212%, with the euro advancing 0.32% to $1.1346. The Japanese yen slipped 0.20% against the dollar to 114.96 per dollar, while the British pound last traded at $1.3595, down 0.02% on the day. Read more

The Russian ruble fell to 80.9275 against the US dollar in early Asian trade to its lowest level against the dollar since November 2020, before it reversed course. The dollar was last down 0.7% against the ruble.

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Additional reporting by Sinad Karo in New York, Devik Jain in Bengaluru, Tom Wilson and Mark Jones in London, Alon John and Chi Yu in Hong Kong, Tom Westbrook in Singapore and Andrew Galbraith in Shanghai Editing by David Goodman and Mark Potter

Our criteria: Thomson Reuters Trust Principles.

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