Several commodities endure rampant rallies amid Russia sanctions

Prices for the likes of oil, nickel, gold and palladium rocketed upwards during wild trading yesterday as the markets grappled with the consequences of Russia’s continued invasion of Ukraine.

Brent crude oil spiked by 17.8% to US$139.13 a barrel after the United States and European allies said they were considering banning imports of Russian oil. The last time the price was this high was July 2008.

Nickel soared by 76% to a 15-year peak of $51,000 a tonne as global supply chains looked to price in the possible absence of Russian nickel. Russia is the world’s third largest nickel producer.

Gold broke through $2,000 an ounce for the first time since August 2020 on safe-haven appeal, while palladium reached a record $3,440 an ounce on fears of shortages of the metal used by car manufacturers in catalytic converters. Russia accounts for 40% of global production.

However, many markets saw rollercoaster swings throughout the day with the ferocity of some gains cancelled out after buying ran its course, according to traders. “Nerves of steel will be needed amid the extreme volatility,” analyst Daniel Briesemann at Commerzbank in Frankfurt said in a note.

Commodity markets have been shaken by tough Western sanctions on Russia that could be widened to include oil. Logistical turmoil has also blocked the flow of grains and metals from the region.