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Wall Street stocks open flat and commodities swing as markets face ‘energy supply shock’

Wall Street shares opened non-stop on Tuesday, while commodities remained volatile as traders weighed in on the prospect of global supply chain disruptions stemming from Russia’s invasion of Ukraine.

Europe’s natural gas prices rose 33% to 285 euros per megawatt hour, after Russia warned it could cut off supplies to the region in response to Western sanctions. TTF-related futures, the region’s wholesale gas price, later dropped to about 219 euros. A year ago, these contracts were traded at about 16 euros.

Wheat and nickel prices also rose sharply as Russian forces stepped up their shelling of Ukrainian cities and approached the southern port of Odessa.

Russian Deputy Prime Minister Alexander Novak said on Monday that the nation, which supplies 40% of Europe’s gas, has “every right” to “impose an embargo on gas extraction” in retaliation for Germany freezing permits for a Kremlin-backed Nordstream 2 pipeline. . In comments on Russian state television, Novak also said U.S. and European plans to consider banning Russian oil imports could raise the price of Brent crude oil to $ 300 a barrel.

“Given Russia’s key role in global energy supply, the global economy may soon face one of the greatest energy supply shocks ever,” said Damian Korblin, head of energy research at Goldman Sachs, in a comment to customers. “The uncertainty about how this conflict and the oil shortage will be resolved is unprecedented.”

Brent crude rose 5.4 percent on Tuesday to nearly $ 130 a barrel after a White House official said U.S. President Joe Biden should Declare a ban On the import of Russian oil into the country. The international oil index climbed to $ 139 the day before.

Meanwhile, in the stock markets, the blue-chip S&P stock index, which closed down almost 3% in Monday In its worst day since October 2020, it was generally stable in early trading, while the high-tech Nasdaq Composite ranged from gains to losses.

Across the Atlantic, the regional stock of Stoxx Europe 600 rose 0.1% after closing lower in the previous three sessions.

European stocks fell Since then, Russian President Vladimir Putin has launched his invasion of Ukraine, not only because of fears of consumer price inflation caused by higher energy prices, but also because of fears of the economic consequences of potential shutdowns in industry as a result of shortages of goods produced in Russia and Ukraine.

In government bond markets, the 10-year yield on the U.S. Treasury bill added 0.11 percentage points to 1.86% on Tuesday, reflecting a sharp drop in the price of the security. The yield on the corresponding German bond rose 0.14 percentage points to 0.13%.

At the same time, gold rose 1.5 percent to $ 2,028 an ounce. The shelter property passed the $ 2,000 threshold in the previous session for the first time since August 2020.

Wheat futures added up to 5.4% to $ 13.63 per bushel before returning to $ 13.06. Ukraine and Russia account for almost a third of global wheat exports.

In other commodities, the Nickel Benchmark contract jumped to a Record over $ 100,000 Tons on the London Metal Exchange, which caused the place to stop trading when the “developing situation in Russia and Ukraine” shook the commodity markets.

Asian stock markets were mostly low, with the CSI 300 index in China closing at 2% and the Japanese Topix down 1.9%.

Wall Street stocks open flat and commodities swing as markets face ‘energy supply shock’ Source link Wall Street stocks open flat and commodities swing as markets face ‘energy supply shock’

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