Bloomberg reported on Feb 24 that North Sea Brent crude surged past US$100 ($135.24) a barrel for the first time since 2014 as Russian forces attacked cities across Ukraine in a dramatic escalation. That has raised the alarm that crude could keep shooting higher, adding inflationary pressure to the global economy, Bloomberg reports. “We view the likelihood of sanctions being placed on Russian crude oil as relatively low, so any risk premium would quickly be erased should the risk subside,” say ANZ Banking Group strategists.
The economic consequences of Russia declaring war on Ukraine is likely to impact markets everywhere. Energy prices are likely to rise, as will inflationary pressures in most parts of the world. Unsurprisingly, markets have tanked.
The Straits Times Index had broken out 3,240 at the start of the year, a level which is likely to provide temporary support, depending on the ferocity of the sell-off. Most likely the upside indicated from the breakout may no longer be valid.
