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LONDON: European stocks slid and oil flirted with $120 per barrel Thursday as conflict raged in Ukraine.

The euro sank to the lowest level against the pound since mid-2016, as the Ukraine conflict triggers concerns over the eurozone’s economic recovery from the pandemic.

In commodities trading, Brent North Sea crude reached $119.84 per barrel, the highest level since early 2012.

WTI touched $116.57, last seen in 2008.

“Supply side pressures remain high, as the conflict in Ukraine triggers new sanctions on Russia, which could soon extend to gas and oil exports and exacerbate the tightness felt in global markets,” noted ActivTrades senior analyst Ricardo Evangelista.

“US inventories continue to decline and the OPEC+ cartel is sticking to its pre-established output levels, despite the growing demand.”

Surging oil prices are playing a major role in sending global inflation to the highest levels in decades, forcing central banks to hike interest rates.

Federal Reserve chief Jerome Powell on Wednesday said he was in favour of a moderate pace of rate increases, with a 25-basis-point lift this month.

He warned that the “near-term effects on the US economy of the invasion of Ukraine, the ongoing war, the sanctions, and of events to come, remain highly uncertain”.

The comments soothed concerns that officials could announce an aggressive 50-basis-point lift.

The issue of Fed tightening has cast a pall over stock markets for months, bringing a near two-year rally to an abrupt end, and that has now been compounded by the Ukraine crisis.

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