Weekly Market Report 11/03/22

Weekly Market Report 11/03/22

Markets were thrown into chaos yet again this week as Russian forces continued their invasion of Ukraine.

Vladimir Putin threatened to turn off gas exports to Western Europe, causing prices to jump to 800p/therm before pushback from Western governments alleviated some of the tension.

Perhaps in response to such threats, President Biden became the first world leader to announce a ban on the importation of Russian oil and gas. The move on Wednesday prompted Downing Street to phase out all Russian energy imports by the end of the year, in the hope that it will starve President Putin of revenue.

The EU’s decision to slash imports from Russia by two thirds before 2023 is more significant as it's reliant on Russia for 40% of its gas. It could be a huge blow to the Kremlin - even if it does not grab the headlines.

Naturally, in the wake of the announcement, prices skyrocketed again. By the end of Wednesday, Brent crude had peaked above $130 a barrel, the highest it has been for 14 years and within touching distance of the all-time record of $147.50. Consumers are already seeing the effects of this at the petrol pump - today the cost of a litre rose to over £1.60 on average.

Looking forward, there is hope for better news at last! - crude prices have stabilised following Wednesday’s hike and have now levelled out at below $120 a barrel. This comes after the UAE indicated  it would step up oil exportation in a bid to fill the gap left by Russia and there is thought to have been progression between the Americans and the Iranians with regards to the lifting of sanctions.

Finally, as we’re sure you are aware, today is Lithuanian Independence Day! So from everyone at PPAYA, Happy Restoration of Lithuania's Independence day and have a great weekend!