WORLDWIDE: HEADLINES
U.S. Gasoline Prices Soar To Highest Since 2008 On Russia Conflict -AAA
U.S. gasoline prices at the pump jumped 11% over the past week to the highest since late July 2008 as global sanctions cripple Russia’s ability to export crude oil after its invasion of Ukraine, automobile club AAA said on Sunday.
AAA said average U.S. regular grade gasoline prices hit $4.009 per gallon on Sunday, up 11% from $3.604 a week ago and up 45% from $2.760 a year ago.
The automobile club, which has data going back to 2000, said U.S. retail gasoline prices hit a record $4.114 a gallon on July 17, 2008, which was around the same time U.S. crude futures soared to a record $147.27 a barrel.
The most expensive gas in the country is in California at $5.288 a gallon, followed by Hawaii ($4.695), Nevada ($4.526) and Oregon ($4.466), according to AAA.
U.S. gasoline futures, meanwhile, soared to a record $3.890 per gallon on Sunday.
Gasoline price provider GasBuddy said the average price of U.S. gasoline spiked nearly 41 cents per gallon, topping $4 for the first time in almost 14 years, and stands just 10 cents below the all-time record of $4.103 per gallon.
GasBuddy said that weekly increase was the second largest ever, following a jump of 49 cents per gallon during the week of Sept. 3, 2005, after Hurricane Katrina tore through the U.S. Gulf Coast.
“Increasing oil prices continue to play a leading role in pushing prices higher,” AAA said in a release, noting “pump prices will likely continue to rise as crude prices continue to climb.”
U.S. crude futures soared more than 12% to $130.50 per barrel late Sunday, their highest since July 2008, as the United States and its European allies consider banning imports of Russian oil.
Full coverage: REUTERS
China’s Economy Resilient Despite Uncertainties Caused By Ukraine Crisis -State Planner
China’s economy remains resilient despite rising uncertainties caused by the Ukraine crisis, the country’s state planner said on Monday.
China will enhance policy coordination and speed up the roll-out of policies favourable for growth, Lian Weiliang, a vice head at the National Development and Reform Commission, told a news conference.
Beijing has targeted slower economic growth of around 5.5% this year amid an uncertain global recovery and a downturn in the country’s vast property sector.
Full coverage: REUTERS
WORLDWIDE: FINANCE/BUSINESS
Oil Surges, Shares And Euro Hit The Skids
Oil prices soared and shares sank in hectic trading on Monday as the risk of a U.S. and European ban on Russian product and delays in Iranian talks triggered what was shaping up as a major stagflationary shock for world markets.
The euro extended its slide, hitting parity against the safe haven Swiss franc, and commodities of all stripes were on the rise as the Russian-Ukraine conflict showed no sign of cooling.
Russia calls the campaign it launched on Feb. 24 a “special military operation”, saying it has no plans to occupy Ukraine.
Having surged more than 10% in wild early action, Brent was last quoted $7.90 higher at $126.01, while U.S. crude rose $6.67 to $122.35.
That jump will act as a tax on consumers and the potential blow to global economic growth saw S&P 500 stock futures drop 1.5%, while Nasdaq futures shed 1.9%. U.S. 10-year bond yields also dropped to their lowest since early January.
EUROSTOXX 50 futures dived 3% and FTSE futures 2.5%.
Japan’s Nikkei (.N225) sank 3.2%, while MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) lost 1.6%. Chinese blue chips (.CSI300) shed 0.8% amid a sea of red across Asian markets.
Having climbed 21% last week, Brent crude was further energised by the risk of a ban of Russian oil by the United States and Europe.
“If the West cuts off most of Russia’s energy exports it would be a major shock to global markets,” said BofA chief economist Ethan Harris.
He estimates the loss of Russia’s 5 million barrels could see oil prices double to $200 a barrel and lower economic growth globally.
And it is not just oil, with commodity prices having their strongest start to any year since 1915, says BofA. Among the many movers last week, nickel rose 19%, aluminium 15%, zinc 12%, and copper 8%, while wheat futures surged 60% and corn 15%.
That will only add to the global inflationary pulse with U.S. consumer price data this week expected to show annual growth at a stratospheric 7.9%, and the core measure at 6.4%.
Full coverage: REUTERS
Euro Slides As War In Ukraine Stokes Inflationary Shock
The euro tumbled to a fresh 22-month low on the dollar and hit multi-year troughs on the yen, Swiss franc and sterling as war in Ukraine drove up commodity prices and stoked fears of a stagflationary shock that would hurt Europe most of all.
The common currency dropped as much as 0.6% to $1.0864 in early Asia trade, its lowest since May 2020, opening the way to its 2020 trough around $1.0636.
It fell below one Swiss franc, hitting 0.9982, for the first time since the Swiss quit their euro peg in 2015.
Oil futures, which surged more than 20% last week, leapt 10% as the United States and Europe mull bans on Russian imports. European gas prices already hit a record on Friday.
“This is very bad news for global growth – particularly Europe, given their dependence on gas from Russia,” ANZ analysts said in a note.
“All up, it’s another big, ugly supply shock on top of lingering COVID impacts, with serious inflationary consequences that give central banks absolutely no room to ‘give growth a chance’.”
Fighting intensified over the weekend and attempts at a ceasefire to allow civilians to evacuate from the besieged city of Mariupol seem to have so far failed.
Russia calls the campaign it launched on Feb. 24 a “special military operation” and says it has no plans to occupy Ukraine.
As the euro fell to a 15-month low of 124.78 yen and touched its lowest since mid-2016 on the pound at 82.23 pence, commodity currencies rose with export prices.
The Australian dollar climbed 0.3% to a four-month high of $0.7390. Spot prices for Australian coal are up more than 70% in about a week as buyers look for alternatives to Russian energy. Wheat, another Australian export, is up about 50% since early February. Against the sliding euro, the Aussie is up more than 10% in about a month.
Full coverage: REUTERS
Oil Price Surges To Highest Since 2008 On Delays In Iranian Talks
Oil prices soared to their highest since 2008 due to delays in the potential return of Iranian crude to global markets and as the United States and European allies consider banning imports of Russian oil.
Talks to revive Iran’s 2015 nuclear deal with world powers were mired in uncertainty on Sunday following Russia’s demands for a U.S. guarantee that the sanctions it faces over the Ukraine conflict will not hurt its trade with Tehran. China has also raised new demands, according to sources.
In response to Russia’s demands, U.S. Secretary of State Antony Blinken said on Sunday that the sanctions imposed on Russia over its Ukraine invasion have nothing to do with a potential nuclear deal with Iran.
The United States and European allies, meanwhile, are exploring banning imports of Russian oil, Blinken said on Sunday, and the White House coordinated with key Congressional committees moving forward with their own ban.
Brent rose $11.67, or 9.9%, to $129.78 a barrel by 6:50 p.m. EST (2350 GMT), while U.S. West Texas Intermediate (WTI) crude rose $10.83, or 9.4%, to $126.51, putting both contracts on track for their highest daily percentage gains since May 2020.
In the first few minutes of trade on Sunday, both benchmarks rose to their highest since July 2008 with Brent at $139.13 a barrel and WTI at $130.50.
Both contracts hit their highest in July 2008 with Brent at $147.50 a barrel and WTI at $147.27.
U.S. gasoline and distillate futures followed the surge in crude prices in the first few minutes after the market opened on Sunday, rising to record highs.
“Iran was the only real bearish factor hanging over the market but if now the Iranian deal gets delayed, we could get to tank bottoms a lot quicker especially if Russian barrels remain off the market for long,” said Amrita Sen, co-founder of Energy Aspects, a think tank.
Full coverage: REUTERS
