The stock market saw a sizable drop early Thursday, while oil crossed the $100 per barrel threshold amidst the Russian invasion of Ukraine.
According to MarketWatch, the Dow Jones Industrial Average opened Thursday with a loss of more than 800 points, down to about 32,300, a drop of about 2.4 percent. The S&P 500 opened at a loss of about 100 points, at 4,100, a 2.5% drop, and the Nasdaq opened down about 500 points, at 12,600, a 2.9 decrease.
Oil prices climbed steadily overnight as well, and both the U.S. and global standard oil prices surpassed the $100 a barrel mark early Thursday morning. The West Texas Intermediate Crude price, the standard for U.S. oil prices, soared to $100.39 per barrel at around 5:30 AM Central time Thursday, according to Markets Insider, while the Brent price, the global standard, rose to $105.60 at around the same time.
Stocks recovered gradually throughout the rest of the day. As of the publishing of this article, the Dow currently sits at just under 33,000, but it is still about 150 points lower than it closed yesterday. The S&P and Nasdaq had fully recovered, however. The S&P currently sits at around a 29-point gain on the day, currently at around 4,250. The Nasdaq also trended upwards, with a 298-point gain on the day, currently at 13,300. The stock market closes at 4:00 P.M. Thursday.
Oil prices stabilized later in the day as well. As of the publishing of this article, according to Bloomberg, the WTI Crude price has dipped down to just under $93 per barrel, while the Brent crude price has slightly decreased, to about $98.50 per barrel.
The Russia-Ukraine conflict has been considered for some time as a potential catalyst for a spike in oil and gas prices for U.S. consumers as a result. According to Forbes, Russia was the second-largest producer of crude oil and condensed natural gas in 2021, producing 10.1 million barrels of oil per day. That number put Russia in second place among world oil producers, slightly behind the United States’s 11.3 million barrels per day, and just slightly ahead of Saudi Arabia’s 9.3 million barrels per day. However, the U.S. consumes about 17 million barrels per day, making the American economy vulnerable to price shocks from foreign affairs, especially the Ukraine invasion. Russia accounts for about 7% of U.S. oil imports, and replacing the oil lost by sanctions, like the ones President Joe Biden imposed on Russia’s Nord Stream 2 pipeline, impose severe pressure on prices to make up the difference. Forbes reports that there could be a premium on oil of between $5 and $20 per barrel because of the Ukraine invasion.
Oil prices previously surged this week to the highest levels since 2014, prompting concerns that both oil and gas prices could climb even higher.
“The international oil benchmark rose 2.6 per cent to $97.84, as traders calculated the possibility of disrupted supply from Russia after Putin directed his military to enter Ukraine’s rebel-held Donetsk and Luhansk regions,” Financial Times stated.
“The price of Brent crude, the international benchmark, neared the $100-a-barrel mark on Tuesday before easing off to about $97 a barrel, a 2 percent increase. West Texas Intermediate was trading at nearly $94.00 a barrel, up about 3 percent,” The New York Times reported.
As The Daily Wire reported, the last time crude oil prices reached such a high level was in 2008, when the price of a barrel of oil reached $147 and gasoline soared to $4.09 a gallon.