8 Mar 2022
Oil Appears Bullish, Asian Shares Plummet as Ukraine-Russia Negotiation Remain Stagnant
The Index Today
Oil prices firmed on Tuesday while shares in Asia took a tumble as negotiation talks between Ukraine and Russia made meager advancement prompting fears of inflation and decelerating economic progress among investors, spurred by the potential debarring of Russian oil.
MSCI’s broadest index of Asia-Pacific shares outside Japan was down by 1% during the afternoon session, as Japan’s Nikkei hit a 16-month low after falling 1.43%. Chinese stocks’ losses bled into Tuesday after dropping to a 20-month low during the last session. Hong Kong’s Hang Seng Index also edged lower by 0.36%.
In response to mounting sanctions, Russia cautioned against oil prices possibly rising to $300 per barrel as it threatened to shut a major gas pipeline to Germany. This comes as crude oil surged to hit 14-year highs recently in the wake of the war in Eastern Europe.
Brent crude soared by 2.6% to $126.42 per barrel by 1:22 am ET, while U.S. crude rose 1.8% to $121.55 a barrel, as fears of disrupted supply caused by the Ukraine-Russia crisis continue to rally markets.
IG Australia Market Analyst, Kyle Rodda said, "Clearly oil is in the firing line now from both sides. And there's a little bit of brinkmanship as to who can threaten whom when it comes to oil imports or exports." He added, "We're entering some kind of crisis when it comes to energy security, and the question is how long that lasts and how big it will be. Whatever size it is, it's going to result in higher inflation and weaker growth, and we're seeing that get priced into equity markets."