U.S. Futures Down, Oil Up After Russia Price Cap

US futures dipped and oil prices rose Monday, Dec, 5, 2022, after the European Union (EU) and the Group of Seven (G7) democracies agreed on a boycott of most Russian oil and committed to a price cap of $60 per barrel on Russian exports.

Photo Insert: Shares were mixed Friday after new data showed US wages were accelerating despite aggressive tactics by the Fed to cool them, and the economy, in its bid to rein in inflation.

Futures for the Dow Jones Industrials and the S&P 500 were each down about 0.4% before the bell, Elaine Kurtenbach and Matt Ott reported for the Associated Press (AP).

It is unclear how much Russian oil the two sanctions measures might remove from the global market, tightening supply and driving up prices. The world’s No. 2 oil producer has been able to reroute much, but not all, of its former European shipments to customers in India, China and Turkey.

On Sunday, the OPEC+ alliance of oil producers, including Russia, maintained their targets for shipping oil to the global economy. In October, the alliance opted to slash production by 2 million barrels per day starting in November, raising tensions with the US and Western allies.

US benchmark crude oil rose $2.17 to $82.15 per barrel in electronic trading on the New York Mercantile Exchange. It lost $1.24 to $79.98 per barrel on Friday.

Brent crude added $2.27 to $87.84 per barrel after Western countries on Monday began imposing the $60-per-barrel price cap and ban on some types of Russian oil. Prices, however, have tumbled since March when a barrel of both US and Brent crude soared above $130 per barrel.

In Asian trading, Hong Kong’s benchmark jumped 4.5% to 19,518.29. The Shanghai Composite added 1.8% to 3,211.81. Tokyo’s Nikkei 225 climbed 0.2% to 27,820.40 and the Kospi in Seoul shed 0.6% to 2,419.32.

In Sydney, the S&P/ASX 200 advanced 0.3% to 7,325.60. Shares fell in Mumbai but rose in Singapore and Taiwan. Thailand’s markets were closed for a holiday. Germany’s DAX and the CAC 40 in Paris each lost 0.6%, while Britain’s FTSE 100 edged 0.2% higher.

Shares were mixed Friday after new data showed US wages were accelerating despite aggressive tactics by the Fed to cool them, and the economy, in its bid to rein in inflation.

That data raised the odds that the Fed will maintain its rate trajectory, which could risk tipping the country into recession. The S&P 500 edged 0.1% lower and the Dow industrials gained 0.1%. The Nasdaq composite fell 0.2%.

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