With the concerns that the corona virus epidemic will drag the world into recession, the money markets, which have experienced great losses, are in complete shock with the sharp decline in oil prices. Saudi Arabia’s announcement that it has cut its crude oil prices by making a move against Russia turned the world markets upside down.
However, with this move of Arabia, fears that the world will be dragged into an economic recession triggered sales in the world’s leading exchanges. Particularly, there was a big loss in the shares of energy companies.
British BP lost more than 20 percent. The fall in Shell was 14 percent, while French Total fell 12.6 percent. It is stated that oil companies may have difficulty in paying their loan debts at these prices.
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Analysts state that twin shocks can be experienced with the drop in oil in markets where there is a huge loss due to the virus epidemic. Investors turn to gold and government bonds, which they see as safe ports.
Arabia announced that it increased its daily oil production above the level of 10 million barrels per day in April, while the price of crude oil decreased by $ 6-8 per barrel. With Arabia’s move, it wrestled with Russia in oil and arm wrestling.
$ 140 IN 2007
Oil prices in the international markets have experienced the most severe decline since 1991. Brent oil prices fell by nearly 30 percent to $ 30, with the Organization of the Petroleum Exporting Countries (OPEC) unable to reach agreement on non-OPEC countries to cut production.
Oil prices were trading at $ 72 at the beginning of January. Oil prices had not declined to $ 30 levels since 2003. Crude oil prices, which were directly affected by the developments in the global economy, in 1991, when the credit and deposit crisis in the USA, the barrel price of Brent crude oil was at the level of 40 dollars.
The oil, traded at $ 140 in December 2007, declined to $ 45 with the financial crisis in 2008.
While the Asian stock exchanges suffered great losses due to the earthquake experienced in the oil markets, the losses in the European stock markets, which followed a vendor-wide trend, reached 7 percent.
Economists pointed out that the oil war that started between Russia and Arabia triggered a flawless storm, while the European economy was experiencing complete chaos due to the virus outbreak in Italy. There was a hard sale in the US stock exchanges and transactions stopped sometime.
The fear index is running to the top
Pointing out that the volatility in the markets has increased excessively, analysts stated that the VIX index, which is defined as the fear index, has seen its highest level since the 2008 crisis with 54 points, and investors should act cautiously.
The fear index last saw 82 points in the 2008 crisis. VIX index measures possible volatility in money markets in the next 1 month period.
EXCHANGE 7 BILLION DOLLARS
The sales wave in the world markets also affected Borsa Istanbul. Borsa İstanbul started the day with a decrease of 2.79 percent from 106.539 points. The BIST 100 index closed the day at 103,524 points, down 5.54 percent. The market value of the BIST 100 index decreased by $ 7.2 billion in a day to $ 118.3 billion.
While the TL lost 0.3 percent in one day, the dollar completed the day at 6.1200 liras and the Euro at 6.9660 liras. Turkey’s five-year term debts of the bankrupt insurance against the cost of showing credit default swaps (CDS) premium over the last traded 380’n. CDS was last up to 410 points in October 2019.
Gold can see 1800 dollars
Spot gold surpassed $ 1,700 for the first time since December 2012, with investors looking for a safe haven. While the ounce price of gold was $ 1,702, grams of gold in the Grand Bazaar found buyers of 327.59 pounds.
US-based investment bank Goldman Sachs predicted that gold prices could rise up to $ 1,800. Analysts said the decline in the dollar also supported the rise in gold.
Russia prohibits foreign exchange transaction
The Russian Ruble suffered the most from the shock wave triggered by oil wars. The Russian Ruble was trading at 74.02 against the dollar yesterday, with a loss close to 9 percent. The Central Bank of Russia decided to stop foreign exchange purchases for 30 days in order to control the fluctuations in the markets.
In the statement made by the bank, it was stated that, in accordance with the budget rules, the foreign exchange purchase was stopped for 30 days on the developments in the global oil markets. Against the dollar, the Mexican Peso fell 4.5 percent, the Brazilian Real 2.5 percent, and the South African Rand fell 1.9 percent. The Indian Rupee fell 0.2 percent and the South Korean Won fell 0.9 percent. Recep GENEL / SÖZCÜ
