Gas price shoots up 30% on Russian invasion of Ukraine; Amsterdam stocks facing drop
The price of gas shot up by more than 30 percent on Thursday on the leading Amsterdam stock exchange following Russia's invasion of Ukraine. Investors on the AEX are preparing for a significant price fall on Thursday.
The news that Russia has invaded neighboring Ukraine is causing turmoil in global financial markets. Asian stocks are showing heavy losses, and US futures also point to a sharply lower opening on Wall Street. Investors are selling their shares and seem to be looking for safe havens such as gold. The price of the precious metal has already reached its highest level in more than a year.
The AEX index on Beursplein 5 is down a loss of 3.5 percent based on the opening indicators. The main index threatens to fall below 700 points for the first time since May 20 last year. Elsewhere in Europe, stock market indicators will also open with significant losses. In Tokyo, where investors returned after a day off, the Nikkei closed 1.8 percent lower. The Hang Seng index in Hong Kong lost 3 percent.
Trading on the Moscow stock exchange was briefly suspended on Thursday, a few hours after Russian President Vladimir Putin announced a military operation in Ukraine. The Russian ruble fell to an all-time low against the dollar before trading halted. Trading resumed at 8:00 a.m. Dutch time.
The price for a megawatt-hour of gas was 116 euros shortly after the opening of trade. On Wednesday, the trade closed at a price of 87.45 euros. Russia is a major gas supplier, and the fear is that the gas tap from the country will be closed because of the war in Ukraine.
Europe depends on Russia for more than a third of its natural gas supply. Experts estimate that 15 percent of the gas consumed in the Netherlands is from Russia. The Russian majority state-owned gas company, Gazprom, told Bloomberg that the supply of the fuel to Europe will continue as usual.
By the end of last year, the price of natural gas already reached a record high due to low reserves, and increasingly strong demand from industries recovering from the coronavirus crisis. Russia did fulfill its long-term contracts, but experts believe the Netherlands was reluctant to order additional gas in the short term. The gas crisis has already led to the bankruptcy of several small energy suppliers in the Netherlands.
Oil prices also skyrocketed due to the Russian attack. Brent oil became 5.6 percent more expensive at USD 102.23 a barrel and cost more than USD 100 a barrel for the first time since 2004. The price per barrel of American oil also rose more than 5 percent to 96.88 dollars. Russia is a significant oil producer, and traders fear disruption to Russian oil supplies due to possible sanctions from the West. US president Joe Biden already announced that he would take more measures against Russia.
Among the companies on Damrak, attention is focused on animal feed company ForFarmers, industrial service provider Aalberts, and asset manager Van Lanschot Kempen, who published figures. In addition, the Unilever share is quoted ex-dividend. Outside the Damrak, large companies such as Deutsche Telekom and insurance company AXA came out with results. Heineken competitor AB InBev and Adecco, a competitor of Randstad, also opened the books.
The euro was worth $1.1244 against $1.1318 a day earlier. Risky investments like cryptocurrencies fell. Bitcoin, the largest cryptocurrency globally, fell more than 7 percent in value to about $34,900. Ethereum plunged 11 percent to about $2,300.
Reporting by ANP.