Crude oil, aluminium and nickel futures traded higher on commodity exchanges on Tuesday morning following Russia’s announcement to recognise the independence of two breakaway regions in eastern Ukraine, and its plans to send forces to those areas.

March crude oil futures were trading at ₹6,935 per barrel on the Multi Commodity Exchange (MCX) during the initial hours of trading on Tuesday morning against the previous close of ₹6,868, up by 0.98 per cent. April futures were trading at ₹6,843 against the previous close of ₹6775, up by 1 per cent.

May Brent oil futures were at $94.07, up by 1.16 per cent, and April crude oil futures on WTI at $92.64, up by 2.69 per cent.

Economic sanctions

The Russian state television channel showed Russian President Vladimir Putin signing a decree recognising the independence of the Ukrainian breakaway regions such as the ‘Donetsk People's Republic’ and the ‘Lugansk People's Republic’. He was joined by Russian-backed separatist leaders of these regions. Russia also decided to deploy its forces in these regions.

Following this, US President Joe Biden announced sanctions on these two regions. Addressing the nation on Tuesday, Volodymir Zelensky, Ukraine President, accused Russia of violating Ukraine’s sovereign territory with this development.

Russia is one of the major producers of crude oil. Any sanctions by the US and European countries on it will have an impact on the supply of crude oil to the already tight global market.

March aluminium futures were trading at ₹267.70 per quintal on MCX in the initial hour of Tuesday morning against the previous close of ₹263.55, up by 1.57 per cent.

The three-month aluminium contracts on LME (London Metal Exchange) were trading at $3324.50, up by 1.37 per cent.

On MCX, March nickel contracts were trading at ₹1833.70 in the initial hour of Tuesday morning against the previous close of ₹1825, up by 0.48 per cent.

The three-month nickel contracts on LME were trading at $24435, up by 0.35 per cent.

Russia is a major producer of aluminium and nickel. Russia may attract international sanctions if it attacks Ukraine.

Jeera slips

On the National Commodities and Derivatives Exchange (NCDEX), March jeera futures were trading at ₹21,675 in the initial hour of Tuesday morning against the previous close of ₹21,830, down by 0.71 per cent.

April dhaniya contracts were trading at ₹10,844 on NCDEX in the initial hour of Tuesday morning against the previous close of ₹10,832, up by 0.11 per cent.

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