SINGAPORE/LONDON: Commodity prices jumped on Monday with strong gains in oil, grains and metals after Russia put its nuclear deterrent on high alert and Western nations imposed tough new sanctions on Moscow following its invasion of Ukraine.
Crude oil climbed back above $100 a barrel towards 2014 highs, palladium and wheat both gained 5% as traders tried to price in disruptions to Russian supplies, while gold was boosted by safe-haven demand.
European and British wholesale natural gas rose 20-30%, even though Russian supplier Gazprom said it was shipping gas to Europe via Ukraine in line with customers' requests.
Oil soars past $102 as sanctions and pressures on Russia mount
"The range of near-term price outcomes for commodities has become extreme, given the concern of further military escalation, energy sanctions or potential for a cease-fire." Goldman said in a note.
Russian President Vladimir Putin put Russia's nuclear deterrent on high alert on Sunday in the face of a barrage of Western reprisals for his war on Ukraine, which said it had repelled Russian ground forces attacking its biggest cities.
Russia calls its actions in Ukraine a "special operation".
"Russia could retaliate to these harsh measures by reducing or even completely suspending energy shipments to Europe, though as yet there is no indication of this happening," analysts at Commerzbank said.
"In fact, Russian gas deliveries to Europe even increased on Friday to their highest level since December and the picture painted by the provisional data for today is not fundamentally different."
Germany to step up plans to cut dependence on Russia gas
A decision by Western allies to block "selected" Russian banks from the SWIFT payments system could disrupt shipments of crude and other commodities from Russia, which accounts for 10% of global oil supplies.
Russia's contribution to world supplies of palladium aluminium and nickel are 40%, 10%, 6% and 10% respectively.
Aluminium hit a record high at $3,525 a tonne while and nickel headed back towards a near 11-year peak hit last week.
Aluminium surges to record high
Supplies of energy-intensive aluminium and zinc could be further disrupted if European smelters decide electricity prices are too high to keep smelters running.
Europe produces around 6% of the world's aluminium and 15% of its zinc.
Together with Ukraine, Russia accounts for around 29% of global wheat exports, 19% of global corn exports and 80% of world sunflower oil exports.
Corn gained 4% while soybeans rose 2.6%.
Malaysian palm oil futures rose for a seventh session in eight, boosted by a rally in crude and soyoil prices and fears of cuts to sunoil flows from the Black Sea.
Japanese rubber futures rose. Natural rubber often takes direction from energy prices as its rival product synthetic rubber is derived from crude oil.
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