Russian economic exclusion continues; ASX Could Fall Despite Energy, Minerals Rallies

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All eyes are on the energy market as the United States weighs in on a Russian oil and gas ban, with new pain points hitting bowsers around the world.

The ASX opened 0.6% higher but is expected to trail European and US markets in the red as war in Ukraine continues to rage and floods ravage large swaths of NSW and Queensland.

Global oil continued to surge, reaching $120 a barrel before falling back to around $111, and European gas remained at its highest level on record.

Meanwhile, some pumps in Australia have exceeded the $2 per liter threshold.

ASX futures were down 77 points or 1.1% at 7049 at 7.30am this morning. On Wall Street, the Dow was down -0.02%, the Nasdaq lost -1.3%, but the S&P 500 was up +0.1%.

In Europe it was gloomier, with the Stoxx 50 at -2.1%, the FTSE at -2.6%, the CAC at -1.8% and the DAX down -2.2%.

Sanctions watch: Russia is ‘cancelled’

The ruble fell as initial sanctions imposed in response to Ukraine’s now week-long war begin to bite, including the suspension of the Nord Stream 2 gas pipeline to Germany, a freeze on Russian assets and banking and the country’s ejection from the SWIFT global banking network.

The United States is targeting Russian oil refining capabilities as pressure continues to mount for the West to ban Russian oil and gas.

In the latest round of sanctions, the White House pledged to go after “friends of Putin”, banning travel to oligarchs and their associates.

The UK announced this week that Russian ships would be blocked in its ports, while the EU is considering a ban on Russian ships.

Australia’s second-largest retirement fund, the Australian Retirement Trust – created from the merger of Sunsuper and QSuper on Monday – is offloading its $133 million portfolio of Russian assets, as treasurer Josh Frydenberg s relies on $3.5 trillion sector to sever all financial ties with Russia.

A bright spot for raw materials

Australian oil, gas and coal stocks rose on the ASX, possibly driven by the threat of a halt in supply from Russian sources. Whitehaven Coal added 10.6%, Beach Petroleum (ASX:BPT) added 4.7% and Woodside Petroleum gained 3%.

Minerals continued to recover: Pilbara Minerals climbed 5.4%, nickel mines closed 5.2% and Oz Minerals rose 5%. Rio Tinto climbed 3.7%, BHP 3.6% and Fortescue Metals 4.2%. Australian Strategic Minerals Limited

The dollar is up 0.3% to 73.2 US cents, while iron ore is still going strong, gaining 5.5% to US$153 a tonne.

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