Global oil prices approached $100 a barrel on Monday following an announcement from Kremlin that Russia will officially recognise two breakaway regions in eastern Ukraine as independent nations.
Brent crude oil, against which Nigerian crude oil is priced, rose to $97.61 per barrel on Monday before pulling back to $96.64 as at 4:52 am Nigerian time on Tuesday. The U.S West Texas Intermediate appreciated to $93.60 a barrel before moderating to $92.32 per barrel.
The uncertainty surrounding global crude oil supply peradventure Russia-Ukraine crisis deteriorate continues to dictate prices of crude oil and the economies of commodity depending nations like Nigeria.
Earlier on Monday, the French President had claimed the United States and Russia have reached an agreement in principle to hold a US-Russia summit on Ukraine, however, Kremlin immediately responded that no date for a meeting between the two nations yet.
Following Russia’s latest move “we are much closer to military intervention, which of course is going to drive a lot of the risk off sentiment in the markets,” said Carlos Casanova, senior Asia economist at UBP.
Stocks across the world closed in the red on Monday with the Asia Pacific index, MSCI, outside Japan, dropping 1.44%, largely weighed upon by Hong Kong and mainland China. Japanese Nikkei dipped by 2%.
As expected, the Japanese Yen, a known safe-haven currency, gained 0.2% to a three-week high of 114.50 against the United States Dollar before paring gains. Euro common currency shed 0.1 percent to $1.1296.
“In these circumstances, risk metrics are the driving force,” said NAB head of foreign exchange strategy, Ray Attrill.
Markets were closed in the United States on Monday for the Presidents Day holiday.
“Oil prices are once again marching upwards, as the optimism of a Biden-Putin meeting fades, while OPEC+ is continuing to struggle to hit its quotas which have largely created the severe global energy deficit,” said Pratibha Thaker of the Economist Intelligence Unit.