US Stocks Fall by 797 Points as Anti-Russia Sanctions Push Petrol Above $130 per Barrel

© Sputnik / Rosneft / Go to the mediabankA drilling rig at the oil company Rosneft's site at the Tsentralno-Olginskaya-1 well.
A drilling rig at the oil company Rosneft's site at the Tsentralno-Olginskaya-1 well. - Sputnik International, 1920, 07.03.2022
White House spokesperson Jen Psaki told reporters on Monday the Biden administration had not yet reached a decision whether it would ban oil imports from Russia. US President Joe Biden is reportedly already planning to press Saudi Arabia to increase production and is even sending out peace feelers to Venezuela.
When the closing bell rang on Monday, US stocks had continued their downward march several weeks ago and were driven largely by the same fears: the impact of US sanctions on Russia for its special military operation in Ukraine.
The Dow Jones fell by 797.42 points on Monday to finish at 32,817.38; the Nasdaq Composite also declined, falling by 482.48 points to finish at 12,830.96; and the S&P 500 fell by 127.78 points to close at 4,201.09.
The price of petroleum continued to rise over the weekend, hitting $130 per barrel of crude before settling at $123 on Monday, as gasoline prices in the US topped $4 per gallon for the first time in 15 years. Consequently, stocks in petroleum companies increased markedly on Monday, with oil and gas services provider Baker Hughes adding 5% to its stock value. Chevron increased by 1.4% and ExxonMobil by 2%.
“The rise in oil is destabilizing the market,” Jay Hatfield, chief executive and portfolio manager at Infrastructure Capital Advisors, told the Wall Street Journal. “The market is concerned about the war and its impact on U.S. growth and U.S. companies.”
However, bank stocks suffered greatly, with US Bancorp losing 3% of its value and Citigroup down 1.4%. Service companies also declined based on expectations of higher operating costs due to rising gas prices, with McDonald’s, Starbucks and Nike all falling.
US sanctions on the Russian economy, which have targeted its financial sector, have caused chaos in markets around the globe, and on Monday, the US and its allies began discussing a possible ban on importing Russian petroleum products - the country’s largest export. Russia provides 40% of European gas.

However, White House spokesperson Jen Psaki said on Monday that “no decision has been made at this point by the president” and offered no timeline on the decision, either.

Biden is reportedly considering a trip to Saudi Arabia to ask the world’s largest oil producer and a close US partner to increase petroleum production to offset the potential loss of Russian gas.
The New York Times also reported on Saturday that US diplomats had headed to Caracas to try and bury the hatchet with Venezuelan President Nicolas Maduro, using the lure of dropping destructive US sanctions to get him to break with Russian President Vladimir Putin, who has long supported the South American state’s stand against US hegemony in the region. The US has tried for years to oust Maduro from power by supporting a no-name opposition candidate named Juan Guaido, who declared himself the country’s interim leader three years ago.
Some fear that rising oil prices could further fuel rising inflation, which is already at its highest point in 40 years thanks to other operations cost increases caused by the COVID-19 pandemic.
Jim Paulsen, chief investment strategist for the Leuthold Group, told CNBC on Monday that "‘stagflation’ is rapidly becoming the central focus in portfolio strategies,” referring to the 1970s phenomenon caused by Middle Eastern oil exporters imposing an embargo on Western nations who supported Israel in the 1973 war.
“Preparing for slower growth and more persistent inflation is driving investor fears and actions," the analyst added.
Lets stay in touch no matter what. Follow our Telegram channel to get all the latest news:
To participate in the discussion
log in or register
Заголовок открываемого материала