The war in Ukraine created enormous uncertainty in financial markets around the world. In both Asia and the USA, the turmoil led to high volatility and a fall in the stock market, but the decline was undoubtedly greater in Europe.
On the Oslo Stock Exchange, the main index defied the rest of the world and got a boost at the end of February. This rise is due to the high oil and gas prices when the Russian invasion of Ukraine was a reality. However, in the past week, the mood at Boursen has cooled, too.
With that said, high oil and gas prices gave a boost to many of Bursen’s oil companies. By far the largest stock exchange heavyweight, Equinor, has risen above eight percent during this period. Aker BP rose more than thirteen percent. Newcomer Vår Energi is also up more than eight percent over the period.
On Wednesday, the main index on the Oslo Stock Exchange opened at about 0.7 percent.
Ahead of the exchange’s opening on Wednesday, Norske Skog and Yara announced that the two companies would cut capacity as a result of higher raw material prices.
Norske Skog should temporarily close Bruck’s paper mill in Austria. The company wrote that the shutdown is due to the high electricity prices that do not make operating the stations profitable.
“Bruck has delivered newsprint and LWC magazine paper to its customers despite the challenges facing the energy market since the second half of 2021. And although we secured parts of the plant’s energy supply in March, today’s energy prices make Bruck’s operations are unsustainable,” Norsk Skoog CEO Sven Umbudtvedt says in the stock exchange announcement.
Norske Skog’s stock was down six percent in the opening minutes.
Fertilizer producer Yara will slow production at plants in Ferrara, Italy, and Le Havre, France. The reason is high gas prices. The stock is down 1.3 percent since the start.
During a press conference on Tuesday, President Joe Biden and the White House confirmed that the United States is imposing a ban on imports of oil, gas and other energy sources from Russia. When rumors about the ban spread before the press conference, it sent the price of oil directly above $130 a barrel. After a farewell and in the afternoon, the price fell again
On Wednesday, the price of oil rose again above $130 a barrel.
– It was expected to raise this weekend. The big question is whether Europe will follow. It has raised oil prices slightly, but there is more uncertainty about whether Europe will impose sanctions. The United States buys so little that it means little in the global picture. This is kind of the reason why the United States supports him. It does matter in domestic politics without having such significant consequences for the economy, says Danske Bank chief economist Frank Gollum after the confirmation.
Russian oil accounted for eight percent of total US oil imports last year, including supplies of crude oil and unfinished fuel oil.
The UK has also now imposed a ban on imports of Russian oil, but has not yet banned gas and coal.
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