Global oil prices pulled back on Wednesday amid the uncertainty surrounding the Russian crude oil ban and global economies. Brent Crude Oil shed 12% to $112.25 a barrel as of 9:37 pm Nigerian time.
The U.S West Texas Crude oil also dipped by 11.49% to $107.21 a barrel.
Global stocks, however, rebounded from war-induced rout. Standard and Poor 500 rose 2.9% while Germany’s DAX gained a whopping 7.9% on speculation that the last two weeks’ decline reflected escalating sanctions imposed on Russia.
The jump in the value of risk assets, including cryptocurrencies, reflects the uncertainty surrounding global economies on the back of the ongoing Russia-Ukraine war and a series of sanctions being imposed by Western nations on Moscow.
Experts have said the latest sanction on Russian crude oil could worsen the state of global inflation and escalate commodity prices, especially those in which Russia has comparative advantages.
However, market sentiment was lifted on Wednesday after an aide to President Volodymyr Zelenskiy said the country is open to discussing Russia’s demand of neutrality as long as it’s given security guarantees.
“Risk markets are higher today, suggesting traders are no longer in flight mode and are starting to think about value again,” said Chris Low, chief economist at FHN Financial. “That doesn’t mean volatility is over. Economic consequences, macro and micro, are still in flux. The West is still working on sanctions for Russian energy, and the duration and outcome of the war is still a big unknown.”
The rally in U.S. stocks Wednesday comes on the 13th anniversary since the S&P 500 bottomed out following the financial crisis. The gauge has climbed more than 500% in this bull market, with an annual return of about 15%.