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Crude oil jumps on Russian oil ban, Asian stocks struggle

written by Bella Palmer
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Global benchmark Brent was trading at $131.39 per barrel, up 2.66% and US West Texas Intermediate crude was up 2.19% at $126.41 per barrel

Crude oil prices jumped again on Wednesday while Asian stocks struggled for footing as investors assessed the impact of the worsening conflict in Ukraine and a new US ban on Russian oil.

The price of a barrel of crude, already on the march higher in January on supply worries and expectations of a strengthening global economic recovery, has rocketed upward since Russia launched its invasion of Ukraine on Feb. 24.

Oil is now roughly double its early December low.

Risking even higher US fuel prices that could curb economic growth, President Joe Biden on Tuesday imposed an immediate ban on Russian oil and other energy imports in retaliation for the invasion.

The ban caps sweeping US and European sanctions imposed on Moscow for launching the largest war in Europe since World War Two.

Britain also announced it will phase out imports of Russian oil and oil products by the end of 2022.

The oil shock by nature is an accruing one, not a one-off, and the potential for the market to hit $150 before returning to $100 is easier for investors to digest, said Stephen Innes, managing partner at SPI Asset Management.

Putting in force sanctions without first developing surrogate supply contingencies risks Brent crude going much higher, he said.

Global benchmark Brent was last trading at $131.39 per barrel, up 2.66% on the day but still off a peak of $139.13 touched on Monday.

US West Texas Intermediate crude was up 2.19% at $126.41 per barrel.

In equity markets, MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.26%, as a reversal in Chinese shares erased earlier gains.

China’s blue-chip CSI300 index was down 1.27% after inflation data reflected a combination of soft domestic demand and high commodity prices, and as the country continued to report rising numbers of coronavirus cases.

In Hong Kong, where infections have surged to record highs, the Hang Seng was down more than 2%.

But broader regional losses were kept in check by gains elsewhere, with Australia’s resource-heavy ASX 200 up 0.85%. In Tokyo, the Nikkei rose 0.3%.

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