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U.S. markets dive as Ukraine crisis keeps pushing up oil and gas prices

Gas prices soar as Biden weighs Russian oil ban
Gas prices soar as Biden weighs Russian oil ban 02:39

U.S. stock markets took a dive Monday as another big leap for oil prices fueled by Russia's war in Ukraine threatens to squeeze inflation's grip on the global economy. 

The S&P 500-stock index closed down almost 3%, while the Dow was off almost 2.4%, or nearly 800 points, to 32,817. The Nasdaq composite was 3.6% lower. Stocks are on pace for their worst daily losses since Russia invaded Ukraine.

Tougher U.S. sanctions against Russia are expected as the conflict in Ukraine deepens. Democratic Congressman Adam Schiff of California told CBS News on "Face the Nation" Sunday he believes there is "strong" bipartisan backing for a U.S. ban on Russian oil and natural gas imports.

U.S. companies ranging from banks to oil businesses to internet service providers are cutting off Russia's access to their services following its invasion of Ukraine, and the list of other companies doing the same grows daily

"History suggests that large disruptions to oil supply, which a proposed ban on imports of Russia's oil would probably represent, could weigh heavily on the U.S. stock market," Thomas Mathews, markets economist at Capital Economics, said in a research note.

Limited ceasefire

Russian forces were pummeling some Ukrainian cities with rockets even after Moscow announced another ceasefire and proposed a handful of land corridors to allow civilians to flee Ukraine starting Monday.

A similar temporary ceasefire in two Ukrainian cities failed over the weekend — and both sides blamed each other.

U.S. House of Representatives Speaker Nancy Pelosi said the House was exploring legislation to further isolate Russia from the global economy, including banning the import of its oil and energy products into the U.S.

Rising demand and reduced supply push up gas prices 02:49

Oil prices came under additional pressure after Libya's national oil company said an armed group had shut down two crucial oil fields. The move caused the country's daily oil output to drop by 330,000 barrels.

But reports said U.S. officials may be considering easing sanctions against Venezuela. That potentially could free up more crude oil and ease concerns about reduced supplies from Russia.

U.S. crude jumped $5.21 to $120.89 a barrel in electronic trading on the New York Mercantile Exchange, while the global benchmark topped $130. Brent crude, the international pricing standard, hit $139.13 per barrel before falling back Monday. The record high for oil prices was $147.50 in July 2008, according to Bloomberg. 

The spike in global oil prices has pushed the average price for gasoline in the U.S. above $4 per gallon, for the first time since 2008, according to the AAA motor club.

Markets worldwide have swung wildly recently on worries about how high prices for oil, wheat and other commodities produced in the region will go because of Russia's invasion, inflaming the world's already high inflation. The conflict in Ukraine also threatens the food supply in some regions, including Europe, Africa and Asia, which rely on the vast, fertile farmlands of the Black Sea region, known as the "breadbasket of the world."

"The Ukraine-Russia conflict will continue to dominate market sentiments and no signs of conflict resolution thus far may likely put a cap on risk sentiments into the new week," said Yeap Jun Rong, market strategist at IG in Singapore.

"It should be clear by now that economic sanctions will not deter any aggression from the Russians, but will serve more as a punitive measure at the expense of implication on global economic growth. Elevated oil prices may pose a threat to firms' margins and consumer spending outlook," Yeap said.

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