Oil Breaks $100, Havens Rally, Equities Drop as Russia Enters Ukraine

The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, US, November 22, 2019. REUTERS/Angus Mordant/File Photo
The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, US, November 22, 2019. REUTERS/Angus Mordant/File Photo
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Oil Breaks $100, Havens Rally, Equities Drop as Russia Enters Ukraine

The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, US, November 22, 2019. REUTERS/Angus Mordant/File Photo
The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, US, November 22, 2019. REUTERS/Angus Mordant/File Photo

Oil prices broke past $100 and safe havens surged while equities tumbled Thursday after Russian President Vladimir Putin announced a "military operation" in Ukraine, accelerating fears of a major war.

Markets have been hammered this week after the Kremlin recognized two breakaway regions in eastern Ukraine and said it would provide "peacekeepers" to the regions, leading to warnings of a conflagration, AFP said.

The Russian president said in a surprise statement on television: "I have made the decision of a military operation."

He also vowed retaliation against anyone who interfered and called on the Ukraine military to lay down its arms.

There were later reports of explosions in Kyiv as well as the eastern Ukrainian front.

Russia is said to have up to 200,000 soldiers massed on the border with Ukraine, and Washington has warned for weeks that Putin was planning an incursion.

Oil prices rocketed with Brent moving within spitting distance of the $100 not seen since September 2014, while gold and the Japanese yen -- safe havens in times of crisis and turmoil -- also jumped.

The dollar was up more than six percent against the ruble, which has been battered in recent weeks on worries about the impact of sanctions on the Russian economy.

On equity markets, Hong Kong, Sydney, Mumbai and Seoul all fell more than three percent while Tokyo, Singapore, Taipei and Wellington dropped more than two percent. There were also big losses in Shanghai, Manila, Jakarta and Bangkok.

World leaders had been trying to work for a de-escalation but failed, while Ukrainian President Volodymyr Zelensky said he had tried to call Putin but there was "no answer, only silence".

He added that Russia could start "a major war in Europe" in the coming days.

US President Joe Biden deplored the Russian operation as an "unprovoked and unjustified" attack, adding that it would cause "catastrophic loss of life and human suffering".

Earlier, the United Nations was told a full-scale Russian invasion would have a devastating global impact that would likely spark a new "refugee crisis".

The threat of a conflagration has sent markets spiralling, with traders fretting over supplies of key commodities including wheat and metals.

"Russia/Ukraine tensions bring both a possible demand shock (for Europe), and more importantly a much larger supply shock for the rest of the world given the importance of Russia and Ukraine to energy, hard commodities and soft commodities," said National Australia Bank's Tapas Strickland.

The crisis comes as governments struggle to contain runaway inflation fuelled by demand as life returns after recent Covid-19 lockdowns, with many fearing the fragile global economic recovery from the pandemic could be knocked off course.

After staging a slight bounce Wednesday in reaction to what were considered light sanctions against Moscow, Asian markets were back in the red after a hefty drop on Wall Street.

- 'Policy mistakes' -
The stand-off in Europe has provided central banks with a further headache as they move to lift pandemic-era financial support and tighten monetary policy.

Attention is on every utterance from Federal Reserve officials as they prepare to hike interest rates next month, with speculation over how fast and hard it will move.

Commentators said bets are on six increases this year, down from previous forecasts for up to seven, and they said the stakes are rising further.

"Policy mistakes at this point in time are almost guaranteed," Shana Sissel of Banrion Capital Management told Bloomberg Television.

"The question isn't, 'Is there going to be a policy mistake?', but, 'How bad will it be? Will the Fed hike too much too fast, will they front-load everything?'"

And with uncertainty reigning supreme, warnings abound of worse to come, with BNY Mellon Investment Management's Lale Akoner saying: "Expect volatility to really persist in the next few months."

Geopolitical risks were flaring at a "very inopportune time", she added, as traders try to navigate central bank tightening.

- Key figures around 0400 GMT -
West Texas Intermediate: UP 3.6 percent at $95.44 per barrel

Brent North Sea Crude: UP 3.3 percent at $100.04 per barrel

Tokyo - Nikkei 225: DOWN 1.8 percent at 25,980.32

Hong Kong - Hang Seng Index: DOWN 3.1 percent at 22,925.60 (break)

Shanghai - Composite: DOWN 0.9 percent at 3,458.12 (break)

Euro/dollar: DOWN at $1.1245 from $1.1308 late Wednesday

Pound/dollar: DOWN at $1.3517 from $1.3545

Euro/pound: DOWN at 83.19 pence from 83.41 pence

Dollar/yen: UP at 114.79 yen from 114.96 yen

New York - Dow: DOWN 1.4 percent at 33,131.76 (close)

London - FTSE 100: UP 0.1 percent at 7,498.18 (close)



Iraq Oil Output Exceeds 5 million bpd

Majnoon oil field near the Iraqi city of Basra (Reuters)
Majnoon oil field near the Iraqi city of Basra (Reuters)
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Iraq Oil Output Exceeds 5 million bpd

Majnoon oil field near the Iraqi city of Basra (Reuters)
Majnoon oil field near the Iraqi city of Basra (Reuters)

Iraq produces more than 5 million barrels of oil per day (bpd), Oil Minister Basim Mohammed told state news agency INA on Saturday.

According to Reuters, Iraq is pushing for a higher OPEC production quota as the economic fallout from the Iran war and new investment by oil majors increase pressure on Baghdad to boost output, potentially putting it at odds with the producer group.

The conflict has hit Iraq particularly hard, forcing major export cuts and depriving the state of oil revenue, which accounted for 88% of government income last year.


IMF: Any Slowdown in AI-driven Growth Would be Factor for Central Banks

IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
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IMF: Any Slowdown in AI-driven Growth Would be Factor for Central Banks

IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)
IMF Managing Director Kristalina Georgieva speaks during the Annual Meetings Plenary at the Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group (WBG) at the Queen Sirikit National Convention Center (QSNCC) in Bangkok on October 16, 2026. (Photo by Lillian SUWANRUMPHA / AFP)

Central bankers around the world would need to consider any slowdown in AI-driven growth as they assess steps in their fight against inflation, International Monetary Fund Managing Director Kristalina Georgieva said on Friday.

Georgieva said concerns about dependence on the AI investment boom and high valuations were impacting markets around the world.

"Things are going up and down, and this is likely to continue," she told an audience at IMF headquarters in Washington, adding that the volatility would complicate the job of central banks at a time when risks to price stability had been growing.

A steep rout in technology stocks on Thursday rippled through markets on fears that ⁠the Democrats' victory ⁠in the US midterm elections would increase regulatory scrutiny of AI and slow the data center build-out, sending investors to the safety of bonds.

The political jitters are hitting an AI trade already on shaky footing due to worry about return on massive spending on AI-related infrastructure, with the meltdown spurring margin calls and spooking retail investors and hedge ⁠funds alike.

Georgieva said the AI investment boom was lifting growth in some countries, helping to offset a negative oil-supply shock triggered by the war in the Middle East, but it was also adding to inflationary pressures and financial stability concerns.

The IMF last month flagged significant growth and financial stability risks from a potential ending of the AI investment boom, among other factors, including a prolonged Middle East war. At the time, it warned that a steep drop in AI investment could lead to a sharp fall in asset prices, ultimately cutting global GDP ⁠by 1.1% ⁠by 2028, including a 1.8% drop in US output.

Georgieva did not repeat the downside forecast on Friday, but acknowledged the recent market volatility.

"Should there be a slowdown in the AI-driven growth impulse, it would need to be factored in as central banks assess the necessary steps in the fight against stubborn inflation," she said.

Democrats are planning to unleash a flood of new legislation targeting artificial intelligence systems and data-center development when they take control of the US Congress in January, Reuters reported on Friday, citing congressional aides and advocates.

That would mark a sharp shift from the Republican-led Congress, where lawmakers largely focused on promoting AI development and declined to pass legislation restricting the technology.


World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
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World Food Prices Dip in October, but Remain Higher Than a Year Ago

A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)
A worker carries loaves of bread for sale at a bakery in the capital city of Cairo, Egypt November 4, 2026. (Reuters)

World food prices edged lower in October as weaker import demand contributed to monthly declines in cereal, dairy and meat prices, but were still nearly 6% higher than a year earlier, the United Nations' Food and Agriculture Organization said on Friday.

The FAO Food Price Index, which tracks monthly changes in international prices for a basket of food commodities, ‌averaged 133.9 points ‌in October, down from a revised ‌135.6 ⁠in September.

The index ⁠was 5.9% higher than a year earlier, but remained 16.4% below its March 2022 peak.

FAO's cereal price index fell 4.5% from September and was 12.6% lower than a year ago, as wheat and maize quotations declined. Wheat prices eased on weak import demand ⁠and improved production prospects, especially in Argentina.

"Expectations of ‌easing constraints on Black ‌Sea export flows added to the downward pressure on prices, ‌although continued disruptions to Black Sea logistics limited the decline," ‌FAO said in a statement.

Maize prices also eased after reaching a three-year high in September, pressured by the US harvest, expectations of ample supplies in South America and renewed ‌prospects of easing tensions in the Black Sea region.

Vegetable oil prices edged up 0.3%, ⁠as ⁠higher soybean and sunflower oil prices more than offset a fall in rapeseed oil prices.

Sugar prices rose 6.6%, their fourth straight monthly increase, to the highest level since December 2024, after rainfall disrupted harvesting in Brazil. They were now 28.8% above a year ago.

The dairy index fell 1.1%, as lower butter and cheese prices linked to ample supplies and subdued demand outweighed gains in milk powder.

The meat index declined 1.2%, while still slightly above its year-earlier level, as ovine and bovine meat prices fell.