The European stock markets collapse, with the ruble at a minimum and crude oil, gas and electricity on the rise. The Ibex fell 2.3% at the opening. The barrel of Brent has reached a new high in the London futures market and electricity in Spain has risen 8%.
The main european bags have opened the day in negative. The Ibex has started the session this Monday with a decrease of 2.3%, which has taken the selective to 8,293 points, pending negotiations between Ukraine and Russia to stop the war that the Kremlin launched last Thursday against the country neighbor. Like Madrid, the squares of Paris and Frankfurt were left more than 2% and London gave up close to 1%.
the barrel of brent oil for delivery in April it shoots up 4.79% at the opening of this Monday, to trade at 102.6 dollars in the London futures market, which represents a new maximum since September 2014.
The market is still very aware of the conflict between Ukraine and Russia, whose president, Vladimir Putin, has put his nuclear forces on alert in the face of growing international opposition to his invasion. Meanwhile, both countries will negotiate today a possible cessation of hostilities.
At this juncture, the barrel of Brent, which closed the session lower last Friday (at 97.93 dollars), shoots up today and is trading above 100 dollars again.
Meanwhile, in the US, the price of Texas intermediate oil (WTI) rose 5.7% before the official opening of the market, to 96 dollars a barrel.
In Spain the electricity price in the wholesale market it has risen more than 8% this Monday to reach 277.78 euros per megawatt hour (MWh), its highest price of the year, in the midst of Russia’s military offensive on Ukraine. After this increase, the price of electricity will be 52% higher than the previous Monday, and multiplies by 15 the amount that it marked just one year ago (18.53 euros).
The Minister for Economic Development, Sustainability and the Environment, Arantxa Tapia, has stated that the problems from the economic point of view “begin to be important” for Euskadi and he has pointed out that the Basque companies established in Russia and Ukraine are “in tense calm” and already suffering “difficulties” and he does not rule out problems with the gas supply, although now for the Basque Autonomous Community it is “guaranteed”.
The ruble at a minimum
The ruble has collapsed in the Forex market almost a 30% against the dollar and the euro after the announcement by some banks of the SWIFT international interbank clearing system and the suspension by the European Union (EU) of transactions with the Central Bank of Russia (BCR).
Shortly after 09:00 local time, the ruble lost 28.34% against the greenback, whose exchange rate stood at 107.48 dollars per ruble. The Russian currency fell in turn by 27.02%, to 119.8 euros per ruble.
In the case of the dollar, this is a record drop since at least 1993 and in the case of the euro it is the biggest drop since at least 1994.
The Bank of Russia has met urgently this Monday and has agreed to a large rise in interest rates, from 9.50% to 20%, to respond to the expected inflation that will occur as a result of the international sanctions that are have imposed on the country for its invasion of Ukraine.
It also wants to ensure the liquidity of the country’s banks affected by Western sanctions, and has decided to release 733 billion rubles (6.245 billion euros) from accumulated capital reserves for consumer loans and mortgages.
sanctions
Among the latest sanctions, the Norwegian center-left government has ordered the National Bank to immediately freeze all its investments in Russia and not carry out any operations, to then start the sale of assets, as a reaction to the war against Ukraine.
The Norwegian State Global Pension Fund, which invests oil and gas revenues abroad, will freeze and dispose of its millionaire assets invested in Russia, according to the government of this Nordic country.
The investment of what is considered the largest sovereign wealth fund in the world in Russia amounts to about 27 billion Norwegian crowns (2,709 million euros), according to Norwegian economic media.
The massive and unprecedented economic sanctions include restrictions on banks, energy, finance, exports, transportation, technology and visa policy, as well as personal financial sanctions against the Russian president himself and the deposits of Russian elites. Among these sanctions is the closure of European airspace from Sunday night for all Russian air operators or any Russian-registered aircraft.
Impact of the crisis on energy markets
The Saudi crown prince, Mohamed bin Salman, has stated that Saudi Arabia is committed to OPEC +, the 13 countries of the Organization of Petroleum Exporting Countries and 10 other external partners, including Russia, to inject 400,000 barrels of oil per day each month until September 2022.
This pact was agreed in July 2021 by the 23 members of OPEC + in order to gradually recover the level they had before the crisis caused by the covid-19 pandemic.
In recent months, this alliance has resisted pressure from the United States and the European Union (EU) to increase production and curb the rise in prices that reached their highest levels for seven years.
The EU has increased its contacts in recent weeks with natural gas suppliers, including Qatar, Egypt and Algeria, in search of new suppliers due to the possibility of the suspension of Russian gas supplies to Europe as a result of the conflict in Ukraine, which represents 40% of community needs.
Source: Eitb
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