Oil drops $2 after reserves release
Global stocks fell further from Friday’s recent six-week highs on concerns over the Russian-Ukrainian war and recession risks, and oil fell $2 a barrel on reserve releases.
European buyers of Russian gas faced a deadline to start paying in rubles on Friday, while negotiations to end the five-week war were set to resume even as Ukraine braced for fresh attacks in the south and east. Russian President Vladimir Putin’s decision to use the gas in response to Western sanctions has prompted Germany, the most dependent on Russian gas, to accuse him of “blackmail” during its activation. an emergency plan this could lead to rationing.
The war is also threatening to disrupt global food supplies, with a US government official sharing footage of what he said was damage to Ukrainian grain storage facilities.
Oil prices continued to fall following Thursday’s announcement of huge releases of US Strategic Reserves and ahead of a Friday meeting of oil-consuming countries to discuss their own reserve releases. U.S. crude futures fell more than $2 a barrel to $98.17 and Brent futures also fell $2 to $102.66 a barrel. Oil is on track for a weekly decline of 14% – the steepest in nearly two years, after an earlier surge largely due to conflict in Ukraine saw prices rise more than 30%.
Investors worry about whether inflationary pressures force central banks to aggressive rate hikespotentially triggering recessions.