Gold to Oil Surge as Commodities Achieve Six-Month High on Ukraine
March 4, 2014 10:20 am
Advances in everything from gold to oil pushed commodities to the topmost mark since September as Ukraine’s turmoil increased the appeal of haven assets and fueled concern that energy and agricultural supplies will be interrupted.
The Standard & Poor’s GSCI Spot Index of 24 raw materials spiked up as much as 2.1 percent to 663.48 yesterday, the topmost since September 9, and settled at 660.22 in New York. Crude oil leaped as much as 2.6 percent, wheat appreciated 7 percent, while gold climbed 2.5 percent. Corn and gasoline also rallied.
“The uncertainty of how the Ukrainian issue will play out will continue to lift commodities across the board,” Chad Morganlander, a Florham Park, New Jersey-based fund manager at Stifel Nicolaus & Co., which oversees about $150 billion of assets, said in a telephone interview. “Ukraine being a major supplier of grain has cast some doubt in the global markets.” Demand for haven assets such as gold “will continue until there’s a more diplomatic approach taken,” he said.
Russia, the world’s biggest energy exporter, seized control of the Black Sea region of Crimea in Ukraine, where tension has heighten since Russia-supported Viktor Yanukovych was overthrown as president on February 22. More than half of Russia’s gas exports to the European Union are shipped through Ukraine, which was projected to be the third-largest corn exporter this year, after the U.S. and Brazil, and sixth-biggest in wheat.
The GSCI measure of commodities increased 4.4 percent since the end of December, bouncing back from a 2.2 percent decline last year.
Financial Value of Gas
Natural gas futures leaped as much as 2.8 percent in New York yesterday as Ukraine mobilized army reserves and in the middle of assumption that a winter storm moving from the U.S. Midwest to the Northeast will increase heating demand. Financial values deletes the advances, and slide lower as much as 3.2 percent. U.K. gas, which is not part of the commodities index, advanced the most since September 2011.
Russia, which offered 30 percent of Europe’s natural gas last year, sends half of its supplies via Ukraine. So far, Russian gas shipments to Ukraine and the rest of Europe haven’t been disrupted during the crisis.
About 313,000 barrels of crude a day transited via Ukraine in 2013, according to the country’s Energy Ministry. The southern branch of the Druzhba pipeline, which transports about 1.2 million barrels of Russian oil to Europe, passes through Ukraine on its way to refineries in Hungary, Slovakia and the Czech Republic.
Monopoly Export
OAO Gazprom, Russia’s gas-export monopoly, may end last year’s settlement to supply Ukraine at a less expensive rate unless it’s paid $1.55 billion owed for fuel, the firm said March 1. It’s the first time since the overthrow of Yanukovych that Russia has directly utilized its position as Ukraine’s dominant energy supplier to pressure the current regime.
Wholesale gas in Europe hiked in January 2009 after Russia stopped pipeline deliveries in the middle a dispute over financial values and transit terms.
Brent crude oil soared for a second session yesterday, while West Texas Intermediate crude boosted 2.3 percent in New York to $104.92 a barrel. Crimea, home to Russia’s biggest overseas naval base, belonged to Russia until Nikita Khrushchev gave it to Ukraine in 1954.
“If the situation is not defused, it has the potential to spark wider economic turmoil through higher oil and gas prices, trade sanctions and a general ratcheting up of global tensions that could endanger the fragile global economic recovery,” Edward Meir, an analyst at INTL FCStone Inc. in New York, wrote in a note on March 3.
Wheat Exports
Corn futures yesterday leaped as much as 4.2 percent to $4.8275 a bushel in Chicago, the topmost for a most-active contract since September. Wheat futures skyrocketed to the topmost performing mark since December.
Ukraine will possibly export 9.5 million metric tons of wheat this season from 7.1 million tons in 2012-13, according to the International Grains Council. It was the fourth-biggest corn exporter in 2012-13, IGC data display. The country may jump over Argentina this year, shipping 18.3 million tons through June from 13.6 million tons a year earlier, based on the IGC data.
U.S. Secretary of State John Kerry went to Ukraine as western leaders looks to respond to the action of troops into Crimea, where a majority of residents speak Russian. EU foreign ministers yesterday called on Russia to withdraw its troops, while the U.S. warned of possible sanctions versus Russia and the Group of Seven nations said it was suspending its participation in planning for the Group of Eight summit in Russia in June. The material has been provided by InstaForex Company – www.instaforex.com
Advances in everything from gold to oil pushed commodities to the topmost mark since September as Ukraine’s turmoil increased the appeal of haven assets and fueled concern that energy and agricultural supplies will be interrupted.
The Standard & Poor’s GSCI Spot Index of 24 raw materials spiked up as much as 2.1 percent to 663.48 yesterday, the topmost since September 9, and settled at 660.22 in New York. Crude oil leaped as much as 2.6 percent, wheat appreciated 7 percent, while gold climbed 2.5 percent. Corn and gasoline also rallied.
“The uncertainty of how the Ukrainian issue will play out will continue to lift commodities across the board,” Chad Morganlander, a Florham Park, New Jersey-based fund manager at Stifel Nicolaus & Co., which oversees about $150 billion of assets, said in a telephone interview. “Ukraine being a major supplier of grain has cast some doubt in the global markets.” Demand for haven assets such as gold “will continue until there’s a more diplomatic approach taken,” he said.
Russia, the world’s biggest energy exporter, seized control of the Black Sea region of Crimea in Ukraine, where tension has heighten since Russia-supported Viktor Yanukovych was overthrown as president on February 22. More than half of Russia’s gas exports to the European Union are shipped through Ukraine, which was projected to be the third-largest corn exporter this year, after the U.S. and Brazil, and sixth-biggest in wheat.
The GSCI measure of commodities increased 4.4 percent since the end of December, bouncing back from a 2.2 percent decline last year.
Financial Value of Gas
Natural gas futures leaped as much as 2.8 percent in New York yesterday as Ukraine mobilized army reserves and in the middle of assumption that a winter storm moving from the U.S. Midwest to the Northeast will increase heating demand. Financial values deletes the advances, and slide lower as much as 3.2 percent. U.K. gas, which is not part of the commodities index, advanced the most since September 2011.
Russia, which offered 30 percent of Europe’s natural gas last year, sends half of its supplies via Ukraine. So far, Russian gas shipments to Ukraine and the rest of Europe haven’t been disrupted during the crisis.
About 313,000 barrels of crude a day transited via Ukraine in 2013, according to the country’s Energy Ministry. The southern branch of the Druzhba pipeline, which transports about 1.2 million barrels of Russian oil to Europe, passes through Ukraine on its way to refineries in Hungary, Slovakia and the Czech Republic.
Monopoly Export
OAO Gazprom, Russia’s gas-export monopoly, may end last year’s settlement to supply Ukraine at a less expensive rate unless it’s paid $1.55 billion owed for fuel, the firm said March 1. It’s the first time since the overthrow of Yanukovych that Russia has directly utilized its position as Ukraine’s dominant energy supplier to pressure the current regime.
Wholesale gas in Europe hiked in January 2009 after Russia stopped pipeline deliveries in the middle a dispute over financial values and transit terms.
Brent crude oil soared for a second session yesterday, while West Texas Intermediate crude boosted 2.3 percent in New York to $104.92 a barrel. Crimea, home to Russia’s biggest overseas naval base, belonged to Russia until Nikita Khrushchev gave it to Ukraine in 1954.
“If the situation is not defused, it has the potential to spark wider economic turmoil through higher oil and gas prices, trade sanctions and a general ratcheting up of global tensions that could endanger the fragile global economic recovery,” Edward Meir, an analyst at INTL FCStone Inc. in New York, wrote in a note on March 3.
Wheat Exports
Corn futures yesterday leaped as much as 4.2 percent to $4.8275 a bushel in Chicago, the topmost for a most-active contract since September. Wheat futures skyrocketed to the topmost performing mark since December.
Ukraine will possibly export 9.5 million metric tons of wheat this season from 7.1 million tons in 2012-13, according to the International Grains Council. It was the fourth-biggest corn exporter in 2012-13, IGC data display. The country may jump over Argentina this year, shipping 18.3 million tons through June from 13.6 million tons a year earlier, based on the IGC data.
U.S. Secretary of State John Kerry went to Ukraine as western leaders looks to respond to the action of troops into Crimea, where a majority of residents speak Russian. EU foreign ministers yesterday called on Russia to withdraw its troops, while the U.S. warned of possible sanctions versus Russia and the Group of Seven nations said it was suspending its participation in planning for the Group of Eight summit in Russia in June.
The material has been provided by InstaForex Company – www.instaforex.com
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