Markets Set for Most Significant Weekly Gains

Commodity markets were on track for their most significant weekly gains in years on Friday, as the closure of Ukrainian ports and sanctions against Russia sent buyers scrambling for replacement supplies of energy, crops, and metals.

Russia invasion of Ukraine and sanctions caused global commodity markets to melt-up.’

More specifically, a massive repricing is going on; it will presumably end when the majority, if not all, of Russia’s contribution to the global supply/demand commodity chain, is scrubbed off the numbers and discounted by the markets. “The Chicago Board of Trade’s (CBOT) most-active wheat contract has risen 40% this week; the largest weekly gain on record, while corn is up 16% and soybeans are up 5%.”

Oil prices are on track to post their best weekly gain since the middle of 2020, with WTI up 19% and Brent up 16% after reaching a decade high this week.

The three-month aluminum contract on the London Metal Exchange, which reached an all-time high on Friday, is on track for its biggest weekly gain on record.

Nickel prices were close to a seven-year high, with the metal on track for its biggest weekly gain since August 2019.

On supply disruption fears, China’s benchmark iron ore futures posted their biggest weekly gain in more than two years, rising nearly 20%.

Meanwhile, Asian equities and the euro fell on Friday following reports of a fire near a Ukrainian nuclear facility due to fighting with Russian forces, heightening investor concerns about the escalating conflict.

Oil Rises Above $112

Oil rose above $112 a barrel in a volatile session on Friday, as concerns about disruptions to Russian oil exports due to Western sanctions outweighed the prospect of increased Iranian supplies in the event of a nuclear deal with Tehran.

Brent crude reached a high of $114.23 per barrel and was up $1.97, or 1.8 percent, at $112.43 by 1050 GMT. West Texas Intermediate (WTI) in the United States gained $2.21, or 2.1 percent, to $109.88 after reaching $112.84.

Crude oil hit a decade high this week, and prices are on track for their best weekly gains since the middle of 2020, with the US benchmark up more than 18% and Brent up 13%.

Prices swung in a $10 range on Thursday but settled lower for the first time in four sessions as investors focused on the resumption of the Iran nuclear deal.