(AFP) – ong (AFP) – Monday was a bad day for stocks. Oil prices rose to a nearly 14-year high, and gold broke through the $2,000 mark. Investors became more worried about the Ukraine crisis’s effect on the global economy.
People were worried about stagflation, which is when prices don’t go up, but they don’t go down. The rise in oil prices is likely to make things even worse.
The commodity dropped more than 18 percent to $139.13, a low not seen since mid-2008 after US Secretary of State Antony Blinken said the White House and allies were discussing a possible ban on Russian imports.
With the nation ranking third in terms of oil production, such a move would exacerbate a supply issue at a time when demand is surging. Additionally, other goods coming from the area, such as wheat and metals, increased significantly.
And Vitol’s Mike Muller warned of further suffering.
In a podcast created by Gulf Intelligence, a consultancy and publisher located in Dubai, “There will be lots of twists and turns,” he said in a podcast.
“While I believe the world has already priced in the idea that the western hemisphere would be unable to absorb a significant quantity of Russian oil, I believe we have not priced in everything.”
Until recently, world governments have refrained from include Russian oil in their broad sanctions on Moscow, citing worries about the effect on pricing and consumers, despite the fact that commerce has grown more difficult as banks withdrew funding and shipping costs increased.
The spike in petroleum poses a problem for central banks as they begin to tighten monetary policy in the epidemic age in order to combat inflation, which is already at a 40-year high in the United States.
At the weekend, the International Monetary Fund warned that the conflict and sanctions against Russia would have a “devastating effect” on the global economy.
Tapas Strickland of the National Australia Bank said: “Global growth anxieties abound as a result of the spike in commodity prices, with’stagflation’ raising its head once again in what must seem like a nightmare movie for a central bank.
“A critical concern for markets is how central banks will react to rising inflation and the prospect of future slower growth.”
Markets have been rocked by concerns about the effect on the global economy, with European stocks especially hard affected due to the continent’s dependence on Russian energy. For the first time since mid-2020, the euro stayed trapped below $1.10.
Asian stock markets were in the red on Monday, with Hong Kong dropping more than 4% at one point and Tokyo and Taipei losing more than 3%.
Seoul and Manila all fell more than 2%, while Shanghai, Sydney, and Wellington all fell more than 1%. Singapore and Jakarta also suffered significant losses. Futures in the United States fell dramatically.
The fear on trading floors pushed safe-haven assets considerably higher, with gold – a critical go-to asset during times of crisis and volatility – reaching as high as $2,000.86, its highest level since mid-2020.
Additionally, the dollar was strong versus the majority of other currencies, while Treasuries maintained their climb.