The oil price grew two percent on Thursday on lower US inventories and geopolitical tensions. The benchmark US crude (August delivery) rose USD $1.99 to close at USD $103.19 per barrel on the New York Mercantile Exchange. The Dow Jones Index fell 0.95 percent while the NASDAQ weakened 1.41 percent.

On Thursday, a Malaysia Airlines Boeing, carrying 283 passengers and 15 crew members (en route from Amsterdam to Kuala Lumpur) was shot down, presumably by an air missile, in the airspace above eastern Ukraine where recently hostilities between the Ukraine government and pro-Russian separatists intensified. It remains unknown which side fired the missile. The tragic case is expected to increase the Ukrainian-Russian conflict and could lead to tighter sanctions against Russia. One day earlier, the Barack Obama administration had already announced new sanctions against Russian energy firms, including Russia’s largest oil producer.

Meanwhile fighting in the Gaza strip intensified after a cease-fire expired as Israel sent troops into Gaza in an offensive against Palestinian militants. As a result of these geopolitical risks, investors avoid emerging markets.

This morning the Malaysian ringgit was the weakest-performing Asian currency among Asian currencies. The rupiah, although depreciating sharply after opening, rebounded and was only down 0.01 percent to IDR 11,688 per US dollar by 11:00 am local Jakarta time.