Oil prices edge closer to $100 a barrel – KION546

By Julia Horowitz, CNN Business

Oil prices have been climbing since the global economy began to recover from Covid-19. Now, as the United States warns that Russia could imminently invade Ukrainethey push even higher.

What’s happening: Brent futures, the global benchmark, rose above $96 a barrel on Monday before falling slightly. Prices, which are now near their highest level since 2014, could weigh on economic growth and further aggravate the global inflation problem.

“No one can really read President Putin’s mind,” Giovanni Staunovo, an oil analyst at UBS, told me. But a supply disruption following a conflict between Russia and Ukraine could send oil above $100 a barrel for the first time in more than seven years, he said.

Russia is one of the world’s leading producers of oil and natural gas. Investors fear that the conflict with Ukraine will damage the region’s energy infrastructure and that sanctions against Russia by Western countries will hurt the country’s exports.

There are also fears that Putin is militarizing oil and gas exports to put pressure on Europe, which depends on Russia for its energy supply.

The situation is particularly delicate given the tensions already present on the oil markets. Energy demand is soaring as pandemic-era restrictions are lifted and travel resumes, while supplies run out.

There has been pressure on the Organization of the Petroleum Exporting Countries and key allies like Russia, a group known as OPEC+, to increase supply. But OPEC+ is already struggling to meet its stated goals.

“If the persistent gap between OPEC+ production and its target levels continues, supply tensions will increase, increasing the likelihood of greater volatility and upward pressure on prices,” he said. said the International Energy Agency in a report last week.

Saudi Arabia and the United Arab Emirates could do more, but Staunovo thinks that is unlikely to happen unless the situation really escalates.

Last week, Natasha Kaneva, head of global commodities strategy at JPMorgan, said oil prices could rise “easily” to 120 dollars a barrel whether Russian crude exports are affected by tensions with Ukraine “amid low spare capacity in other regions”.

Why it matters: Rising oil prices could shock the economies of oil-intensive countries and hurt already-stretched consumer wallets.

the average price of a gallon of gasoline in the United States rose to nearly $3.49 on Monday, from $3.31 a month ago and $2.51 at the same time last year.

“With inflation currently at multi-decade highs and uncertainty surrounding the already unprecedented inflation outlook, the last thing the global economy needs is another leg higher in energy prices.” , Janet Henry, chief economist at HSBC, told clients earlier this month.

There’s more: Fears of a Russian invasion aren’t just rocking the oil market. Global stocks also fell on Monday. The sell-off was strongest in Europe, where the German DAX is down 2.2% and the French CAC 40 is down 2.3%.

Companies ended 2021 on a high note

Markets are very worried about a possible Russian invasion of Ukraine and an interest rate hike by the Federal Reserve.

But behind all the volatility, analysts are pointing to a glimmer of hope: companies are continuing to rake in very strong profits, a momentum that could keep stocks from falling too far despite selling pressure.

Latest: Nearly three-quarters of S&P 500 companies reported results for the last three months of 2021. According to FactSet analyst John Butters, 77% beat Wall Street expectations, which is higher than the five-year average.

S&P 500 companies are now expected to boost fourth-quarter earnings by more than 30%, based on results already released and projections for those still on deck.

That said: expectations for the future are becoming more blurred. For the first quarter of 2022, 47 companies said they expected earnings to be lower than previous forecasts, while only 17 raised their outlook.

Liz Ann Sonders, chief investment strategist at Charles Schwab, told me she thinks we’ve reached an “inflection point” for earnings.

At the height of the pandemic, companies struggled to predict the future and withdrew their earnings forecasts. This encouraged analysts to be more conservative, making it easier for companies to exceed expectations. This dynamic is changing.

“For six straight quarters, we had about just one bar too low,” Sonders said. “I think the tide has now turned.”

Crypto takes control of the Super Bowl

The Los Angeles Rams have defeated the Cincinnati Bengals at Super Bowl LVI — but they’re not the only ones celebrating a big moment.

Cryptocurrency firms spent big on advertising in Sunday’s game as the industry steps up efforts to woo sports fans.

Crypto exchange Coinbase said it had to limit traffic for minutes after running a Super Bowl ad containing a bouncing QR code that took users to a landing page that touted a Bitcoin giveaway for new users.

The company’s chief product officer tweeted that Coinbase “just saw more traffic than we’ve ever encountered.”

FTX, another crypto exchange, featured comedian Larry David, while Crypto.com – which recently bought the naming rights to the Staples Center in Los Angeles, today Crypto.com Arena – got LeBron James on board.

Investor Insight: Bitcoin is trying to push higher after a tough few months. Its price rose 11% in February after falling sharply in December and January. It last traded near $42,600 after hitting an all-time high near $69,000 in November.

Coinbase, meanwhile, was hit hard alongside other companies that recently went public. Its stock is down 23% this year. Investors dumped some riskier stocks as the Federal Reserve prepares to start raising interest rates.

Following

Advance Auto and Avis publish their results after the US markets close.

Coming tomorrow: revenue from Marriott, restaurant brands, Airbnb and Roblox.

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Felix J. Dixon