Crude Rebounds, Ruble Plunges to Record Low as Ukraine Risks Rise

Russian ruble coins are seen in this illustration taken February 24, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

TOKYO, Feb 28 (Reuters) – Crude oil surged as the ruble plunged nearly 30% to a new record high on Monday after Western nations imposed new sanctions on Russia over its invasion of Ukraine , in particular by blocking certain banks from the SWIFT international payment system.

Demand for safe haven pushed bond yields higher, along with the dollar and yen, while the euro tumbled after Russian President Vladimir Putin put nuclear forces on high alert on Sunday, the fourth day of the most major assault on a European state since World War II. Read more

Rising tensions heightened concerns that oil supplies from the world’s second-largest producer could be disrupted, sending Brent futures up $4.21 or 4.3% to $102.14. U.S. West Texas Intermediate (WTI) crude futures rose $4.58 or 5.0% to $96.17 a barrel.

U.S. and European stock futures fell, but Asia-Pacific stocks were mostly higher in volatile trading, buoyed by Wall Street gains from Friday, when the S&P 500 closed in up 2.51%, said Kyle Rodda, market analyst at IG Australia.

“We had a deluge of very negative information this weekend,” Rodda said. “My feeling is that there won’t be much resistance behind this particular move (in Asia-Pacific equities), given that we’re talking about financial stability risks, and sprinkling on top of that the threat of nuclear war.”

“Volatility is heightened,” he said. “Price action is incredibly choppy.”

U.S. emini stock futures were pointing down 1.57% on the restart, while pan-European EURO STOXX 50 futures lost 2.83%.

Japan’s Nikkei 225 (.N225) rose 0.48%, recovering from an earlier loss. Australia’s benchmark (.AXJO) added 0.64% after also falling at one point. Chinese blue chips (.CSI300), however, slipped 0.21%.

The MSCI regional equity index (.MIAP00000PUS) gained 0.09%.

Meanwhile, the 10-year US Treasury yield fell around 6 basis points to 1.92%, and equivalent Australian yields were also down around 6 basis points to 2.18%.

The euro slipped 0.9% to $1.1170 and 0.87% to 129.065 yen, while the risk-sensitive Australian and New Zealand dollars fell 0.66% and 0.76%, respectively.

The ruble fell 29.37% to a record high of 119 to the dollar.

Editing by Stephen Coates

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