Crude oil prices rise more than 0.5% on Tuesday, followed by the conflict between Russia and Ukraine
Crude oil prices rose more than 0.5% on Tuesday as the conflict between Russia and Ukraine continues, albeit well below its seven-year high since last week’s Russian invasion of Ukraine, the main attack on a European country. since World War II.
While global financial markets came to a halt early Tuesday after several days of swings, with gold slipping slightly, investors were on a wait-and-see approach as they monitored the conflict in Ukraine and weighed up its economic implications, particularly on energy prices.
Still, investors weighed in on a coordinated international release of crude supplies against Russian supply disruptions in the wake of Moscow’s invasion of Ukraine.
Concerns about tightening inventories stem as major oil and gas companies, including BP and Shell, have announced plans to end Russian operations and joint ventures.
Buyers of Russian oil are also having problems with payments and ship availability in response to the West’s invasion of Ukraine.
Benchmark Brent oil futures rose to more than $98 a barrel on Tuesday, but fell below a seven-year high of $105.79 after talks over a coordinated release of crude oil inventories by the US and allies to avoid any disruption in the economy. oil and gas supplies from Russia.
“Much of what is happening in the markets is clearly overshadowed by the news around Ukraine and Russia in terms of negotiations, but the main drivers will be the response of governments and central banks in terms of the policy institutions,” Kerry Craig, Sydney-based global market strategist at JPMorgan Asset Management, told Reuters.
“The markets are going to focus on the broader implications of what’s going to happen around energy prices, what that means for inflation in parts of the world,” he said.
To discuss stabilizing oil markets, the International Energy Agency (IEA) will hold a ministerial meeting on Tuesday to discuss the role of its members.
The Organization of the Petroleum Exporting Countries (OPEC) and other producers — including Russia — will also meet on Wednesday and will gradually ramp up deliveries.
For India, the immediate impact of the war between Russia and Ukraine will be inflation, as the country imports nearly 80 percent of its oil needs, according to India’s Investment Information and Credit Rating Agency (ICRA).
Finance Minister Nirmala Sitharaman pointed out on Monday that Ukraine is a major supplier of sunflower oil seeds and fertilizers, and that the disruption of supply would affect essential commodities such as edible oil.
She also said the government was concerned about the impact of the conflict between Russia and Ukraine on India’s foreign trade, especially agricultural exports.
