December 8, 2023

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Global stocks and oil rise after US bans Russian oil imports

Global stocks and oil rise after US bans Russian oil imports

NEW YORK (Reuters) – Global stock markets rose on Tuesday as oil prices continued to rally, spurred by the United States’ ban on Russian oil and other energy imports due to Moscow’s invasion of Ukraine.

US President Joe Biden made the announcement on Tuesday, while Britain said it would phase out imports of Russian oil and petroleum products by the end of 2022.

Brent crude, the benchmark for May, rose $8.06, or 6.5 percent, to $131.27 a barrel by 12:09 pm EST (1709 GMT), before paring gains, rising 5.55 percent to $130.05 at 1:40 EST (1840). GMT). Read more

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Since its invasion of Ukraine in February. On September 24, Western sanctions cut Russia off from international trade and financial markets. Read more

Russia, which has described its actions as a “special operation”, has warned prices could rise to $300 a barrel and could shut down a major gas pipeline to Germany if the West halts oil imports due to the invasion of Ukraine. Read more

Jason McMahon, head of geopolitical risk analysis at Morning Consult, called the US ban noteworthy, but said the “real obstacle” would be Europe banning Russian energy imports.

“Given Europe’s relatively high dependence on energy supplies from Russia, such a step, if realized, would have significant economic and geopolitical repercussions,” he said.

In the absence of such a ban, markets reacted positively to the US and UK moves, reversing to post a slight rally in midday trading.

MSCI World Stock Index (.MIWD00000PUS)which measures stocks in 50 countries, was up 0.08%.

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Dow Jones Industrial Average (.DJI) The Standard & Poor’s Index rose 219.74 points, or 0.67% (.SPX) Gained 25.54 points or 0.61% and the Nasdaq Composite Index (nineteenth) It added 146.53 points, or 1.14%, to 12,977.49 points. STOXX 600 Index is down 0.51% (.stoxx).

Solita Marcelli, chief investment officer for the Americas at UBS’s wealth management arm, said the increase in oil prices over the past week – the second biggest jump in 30 years – is likely to continue, causing continued market volatility.

“The Russo-Ukrainian war has driven oil prices up faster than we previously expected, but we still see a tight balance between supply and demand for crude oil globally, even if the hostilities end and the geopolitical risk relationship associated with the crude oil declines,” Marselli said.

US crude rose 5.4% to $125.85 a barrel, while safe haven gold prices rose 2.4% to $2,045.88 an ounce.

The London Metal Exchange (LME) suspended trading of nickel on Tuesday after prices doubled in just hours to a record $100,000 a tonne, fueled by a race to cover short positions. Read more

UBS Global Wealth Management recommended a neutral stance on stocks and advised clients to hold commodities, energy stocks and the US dollar as a short-term portfolio hedge.

The rise in oil and other commodity prices has heightened investor concerns about global inflation. Data this week is expected to show that the US Consumer Price Index rose 7.9% on an annual basis in February, up from 7.5% in January. Read more

Germany’s benchmark government bond yield rose sharply and the gauge of inflation expectations in the eurozone long-term market rose to its highest level since late 2013.

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The 10-year US Treasury yield was 1.688%.

The euro rose 0.52 percent to $1.0908, after falling 3 percent last week to its lowest level since mid-2020.

The dollar index fell 0.132%.

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(Reporting by Elizabeth Dilts Marshall) Additional reporting by Saikat Chatterjee, Elizabeth Hoecroft, Sujata Rao and Julie Zhou; Editing by Susan Fenton, Angus McSwan, Jonathan Otis and Alexander Smith

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