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LONDON: European stocks slid and oil flirted with $120 per barrel Thursday as conflict raged in Ukraine.

The euro sank to the lowest level against the pound since mid-2016, as the Ukraine conflict triggers concerns over the eurozone's economic recovery from the pandemic.

In commodities trading, Brent North Sea crude reached $119.84 per barrel, the highest level since early 2012.

WTI touched $116.57, last seen in 2008.

"Supply side pressures remain high, as the conflict in Ukraine triggers new sanctions on Russia, which could soon extend to gas and oil exports and exacerbate the tightness felt in global markets," noted ActivTrades senior analyst Ricardo Evangelista.

"US inventories continue to decline and the OPEC+ cartel is sticking to its pre-established output levels, despite the growing demand."

Surging oil prices are playing a major role in sending global inflation to the highest levels in decades, forcing central banks to hike interest rates.

Federal Reserve chief Jerome Powell on Wednesday said he was in favour of a moderate pace of rate increases, with a 25-basis-point lift this month.

He warned that the "near-term effects on the US economy of the invasion of Ukraine, the ongoing war, the sanctions, and of events to come, remain highly uncertain".

The comments soothed concerns that officials could announce an aggressive 50-basis-point lift.

The issue of Fed tightening has cast a pall over stock markets for months, bringing a near two-year rally to an abrupt end, and that has now been compounded by the Ukraine crisis.

Analysts warned of market volatility for some time as fighting in Ukraine weighed further on the ruble and is sending other commodities produced by Russia, including aluminium, to record highs.

Bloomberg's gauge of raw materials is closing in on the biggest weekly gain since at least 1960, the financial data provider said Thursday.

Widespread international sanctions against Russia threaten to put its economy on its knees, while Moody's and Fitch have slashed the country's credit rating to junk.

It comes as Russian companies are removed from international stock markets.

Elsewhere, the European single currency on Thursday slid to 82.76 pence per euro, the lowest level since Britain voted in favour of Brexit.

The eurozone remains vulnerable to energy markets volatility because of its dependency on Russian oil and gas supplies.

"The euro area is very exposed to the events in Ukraine, particularly on the energy side given how reliant it is on Russia," Craig Erlam, analyst at OANDA trading group, told AFP.

Key figures around 1100 GMT

Brent North Sea crude: UP 1.6 percent at $114.77 per barrel

West Texas Intermediate: UP 3.0 percent at $113.93 per barrel

London - FTSE 100: DOWN 0.7 percent at 7,380.87 points

Frankfurt - DAX: DOWN 1.0 percent at 13,857.64

Paris - CAC 40: DOWN 0.4 percent at 6,472.64

EURO STOXX 50: DOWN 0.7 percent at 3,793.14

Tokyo - Nikkei 225: UP 0.7 percent at 26,577.27 (close)

Hong Kong - Hang Seng Index: UP 0.6 percent at 22,467.34 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,481.11 (close)

New York - Dow: UP 1.8 percent at 33,891.35 (close)

Euro/dollar: DOWN at $1.1088 from $1.1126 late Wednesday

Pound/dollar: DOWN at $1.3386 from $1.3405

Euro/pound: DOWN at 82.84 pence from 82.95 pence

Dollar/yen: UP at 115.72 yen from 115.51 yen

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