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The energy market got charged and the bullion market dazzled on Thursday morning after Russian President Vladimir Putin’s announcement of a military operation in Ukraine set off panic reactions in the commodities market.
The development also left the edible oils market on the boil as crude palm oil (CPO) prices increased to a record with spot prices rising above 7,000 Malaysian ringgits (MYR), while the grains market also saw players turning nervous with as wheat and corn prices zoomed.
The energy market was the first to feel the heat as Brent crude oil topped $100 a barrel for April futures. By 8 pm, Brent crude for April delivery stood at $104.31, up over 7.5 per cent on the Intercontinental Exchange (ICE). WTI crude oil hovered near $100 at 99.10.
Gas futures in Europe were almost on fire with TTF gas March futures skyrocketing over 41 per cent to 126.14 euros per megawatt-hour and UK gas March futures vrooming 43.5 per cent to £306.14 per therm.
Sparkling bullion
Gold, the haven asset during geopolitical crisis, was another major beneficiary on the day. Spot gold prices briefly courted with $1,970 an ounce before losing some lustre at $1,935 at 8:15 pm — up over 2 per cent. On India’s Multi Commodity Exchange (MCX), gold April contracts ended 3.7 per cent higher at ₹52,243 per 10 grams.
Silver prices gained over 2.5 per cent at $25.09. On MCX, April silver contracts increased by over 4 per cent at ₹68,350 a kg. Palladium, too, was up 4.6 per cent at $2,602.85 as its supplies could be affected since Russia is the top producer.
CPO at new high
In the edible oils market, CPO gained in tandem with crude, going past the magical 6,000-MYR mark. The May contracts on the Bursa Malaysia Derivatives Exchange closed 7.96 per cent higher at 6,458 MYR, its biggest daily rise in almost 14 years. Spot CPO ended at a record high of 7,093 MYR.
Soybean May futures on the Chicago Board of Trade (CBOT) were up at nearly $17 a bushel, while Black Sea sunflower settled $7.50 higher for April delivery at $1,444 a tonne.
The grains market reacted sharply since it could affect the supply of wheat, corn and sunflower seeds. On CBOT, wheat March futures increased by over 5 per cent to $9.20 a bushel, while corn March contracts were up over 3.5 per cent at $7.05 a bushel.
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