The daily business briefing: March 2, 2022
U.S. and other nations plan to release oil reserves, Moscow seeks to slow investors dumping Russian assets, and more
U.S. among nations planning to release oil reserves
The United States and other world powers plan to release 60 million barrels of oil reserves to help bring down gasoline prices, which have risen in recent weeks as the Russia-Ukraine crisis escalated, the International Energy Agency's governing board said in a statement Tuesday. Russia's unprovoked invasion of Ukraine added pressure to already strained oil markets, pushing oil prices to more than $100 per barrel with some analysts warning prices could hit $130 per barrel. Sanctions imposed on Russia so far haven't hit its oil and gas sectors, although the war could disrupt supply routes. Releasing oil from reserves will "send a unified and strong message to global oil markets that there will be no shortfall in supplies as a result of Russia's invasion of Ukraine," the IEA said.
Russia announces measures to keep investors from pulling out over Ukraine
Russian Prime Minister Mikhail Mishustin announced Tuesday that Moscow would temporarily limit foreigners' ability to dump Russian assets as the country's stocks plummeted due to fallout from its invasion of Ukraine. The ruble has fallen to a record low, and the London-listed iShares MSCI Russia ETF fell 50 percent to a fresh record low as countries around the world imposed devastating sanctions against Russia and investors fled. Moscow's restrictions on capital removal could freeze billions of dollars' worth of foreign-held Russian securities. "It has been a hell of a rollercoaster," said a London-based hedge fund manager invested in European financial firms.
Apple, Ford, Dell curb Russia operations over Ukraine invasion
Apple, Ford, and Dell on Tuesday became the latest companies to suspend operations in Russia in response to the country's invasion of Ukraine. Apple said it would stop selling iPhones and other products in Russia because it was "deeply concerned" about the attack. Exxon Mobil said it would halt a multibillion-dollar oil and gas project in Russia, and make no more investments in Russia. The corporate decisions came on top of sanctions imposed against Russia by nations around the world, blocking many financial transactions and exports. Businesses including Volkswagen warned that the war could add to supply disruptions that have plagued them through the coronavirus pandemic as the fighting prevented the flow from Ukraine of everything from grains to auto parts.
Stock futures rise after Tuesday's plunge
U.S. stock futures rose early Wednesday after falling sharply on Tuesday due to concerns about Russia's invasion of Ukraine. Futures tied to the Dow Jones Industrial Average and the S&P 500 were up 0.8 percent at 6:30 a.m. ET. Nasdaq futures were up 0.9 percent. The three main U.S. averages fell sharply on Tuesday as Russia intensified its attacks on Ukrainian cities. The Dow closed down 1.8 percent. The S&P 500 and the Nasdaq fell 1.6 percent. The market volatility came as oil prices continued to climb on concerns that the war could disrupt supply. West Texas Intermediate and Brent crude, the U.S. and international benchmarks, rose by roughly 4 percent to their highest levels in more than a decade.
Cargo ship sinks with 4,000 VW vehicles on board
The cargo ship Felicity Ace sank Tuesday with about 4,000 Volkswagen AG vehicles on board after the vessel caught fire and was battered by waves about 220 nautical miles off the coast of Portugal's Azores Islands. "The weather was pretty rough out there," Pat Adamson, a spokesperson for MOL Ship Management, a unit of Mitsui OSK Lines Ltd., told Bloomberg. "And then she sank, which was a surprise." The ship was carrying VW, Porsche, Audi, Bentley, and Lamborghini-branded vehicles from the German port of Emden headed to Rhode Island. The fire broke out on Feb. 16. The vessel was left adrift after the crew of the Panama-flagged ship was evacuated.