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Direction and fate of the market was decided

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Good morning, before the start of our trading session today, the direction and fate of the market were decided as news flow emanated that the U.S. and its European allies were discussing a possible ban of Russian oil imports to tighten the economic squeeze on President Vladimir Putin.

The shock of surging prices for oil and other commodities coursed through markets and raised alarm bells at various central banks. The Indian rupee was among the biggest currency losers in Asia.

Here it is interesting to note that U.S. imports of Russian oil are in fact, limited to a mere 8%. As against a higher share of EU and Asian countries. In all probability, the EU and Asia will resist this ban.

At the same time, when there are supply constraints, why the US, or EU not working hard to increase supply from countries like Iran, Venezuela, (who are more than keen to raise their supply) or increase the shale gas supply (from the US) or even why don’t they release higher crude from their strategic reserves.

It seems many conspiracy theories are floating that all events globally are done to inflate Crude prices. Whatever may be the reason, it is very clear that now it will take some more time for the global economy to recover back after suffering heavily from Covid in the last couple of years.

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