Oil surges, equities mostly fall on growing Ukraine fears

HONG KONG (AFP/ APP): Oil prices and safe havens surged Monday while equities mostly fell and the ruble plunged after world powers imposed fresh sanctions on Russia over its Ukraine operation, fanning fears about a possible global energy crisis that could further stoke inflation.
Markets had rallied Friday as dealers assessed that the punishments imposed on Moscow were light enough to not hit its crucial oil exports — Russia is the world’s third-biggest producer — at a time when supplies are thin and demand is surging.
But the picture was changed at the weekend, when the United States and European Union said they would exclude some Russian banks from the international bank payments system SWIFT and personally targeted Putin and Foreign Minister Sergei Lavrov.
They also banned all transactions with Russia’s central bank, sending the ruble crashing, with Bloomberg saying it was indicated to be nearly 30 percent down in offshore trading Monday.
“Removing some Russian banks from SWIFT could result in a disruption of oil supplies as buyers and sellers try to figure out how to navigate the new rules,” Andy Lipow, of Lipow Oil Associates in Houston, noted.
Crude surged, with WTI heading closer to the $100 mark, while Brent bounced back above that level after slipping on Friday.
Other commodities rallied, with wheat up eight percent, while aluminium and nickel were also sharply higher.
Traders will be closely watching a meeting this week of OPEC and other major producers led by Russia, where they will discuss plans for further output.
The group had agreed previously to increase production gradually each month, but the Ukraine crisis could throw those plans into disarray.