Record prices for energy and metals, concerns about Russian exports – 02.03.2022 at 19:03

Oil soars to its highest level in almost a decade due to the war in Ukraine (AFP/Frederic J. BROWN)

The war in Ukraine and worries about raw material supplies, especially from Russia, sent oil prices to their highest level in almost a decade on Wednesday, while natural gas and aluminum set new historical records.

The surge in black gold prices began again after the decision of OPEC + exporting countries, led by Saudi Arabia and Russia, not to increase production more than expected, despite the appreciation that fuels galloping inflation in many countries.

U.S. WTI traded at $108.36, up 4.81% around 1740 GMT after rising to $112.51, a record since 2013. North Sea Brent crude jumped 5.78% to 111.00 after reaching $113.94, the highest since 2014.

Natural gas also rose, with the Dutch TTF up 36.05% to €165.54 per megawatt hour (MWh) after hitting a record high of €194.715.

British gas, for its part, was close to its all-time high in December last year.

The OPEC decision has not cushioned the price hike caused by sanctions against Russia as demand for oil is rising rapidly and OPEC is no longer able to meet its own production quotas in several countries,” said PVM’s Tamas Varga.

The invasion of Ukraine by Vladimir Putin’s Russia has led the European Union and the United States to impose tough sanctions on Moscow, heightening fears that Russian energy exports could be cut off.

Energy Aspects claims on Twitter that most “European major oil companies do not touch Russian oil, but only a few European refiners and brokers” for fear of being hit by sanctions.

Not to mention higher freight rates and war-related insurance premiums, which further complicate transactions, he adds.

Russia is the world’s second largest exporter of crude oil and accounts for over 40% of the European Union’s annual natural gas imports.

“The war in Ukraine is leading to a sharp reduction in energy exports from Russia, even if they are not subject to sanctions,” adds Bjorn Schieldrop, an analyst at Seb.

The EU has cut off seven Russian banks from the Swift international financial system, but has so far taken care to spare two large financial institutions closely linked to the hydrocarbon sector.

US President Joe Biden, however, assured on Wednesday that “nothing is out of the question” when asked about a possible US ban on Russian oil imports.

The Russian-Ukrainian conflict came at a time when oil prices were already skyrocketing due to insufficient supply and a sharp recovery in demand around the world, caused by the lifting in many countries of medical restrictions imposed to combat the Covid-19 pandemic.

The International Energy Agency’s announcement Tuesday of the sale of 60 million barrels of its member countries’ stockpiles, half of which was released by the United States, did nothing to calm prices.

– Crazy Race –

Industrial metals have already been in a frenzy, and “supply disruptions from Russia are becoming more likely,” said Daniel Briesemann of Commerzbank.

Danish shipping giant Maersk announced on Tuesday it was suspending new orders from and to Russian ports, except for food, medical and humanitarian goods, due to international sanctions.

“If other shipping companies follow this example, it will become increasingly difficult to export materials from Russia,” the analyst continues.

A tonne of aluminum reached $3,597 on the London Metal Exchange (LME) on Wednesday, a new all-time high, with nickel hitting a new record since 2011 at $26,505 a tonne.

In 2021, Russia was the world’s third largest aluminum producer after China and India, according to the World Bureau of Metal Statistics, and exports most of its production to Turkey, Japan, China, the United States and European countries. Union.