Closing summary
It’s been another day of wild market moves, mainly in commodity markets.
Fears that Russia’s invasion of Ukraine and wider sanctions imposed by the west could affect supplies from both countries have driven oil and gas prices sharply higher, and have also driven up other commodities such as wheat and corn, and metals. Wheat hit a 14-year peak while aluminium reached a new record high of $3,597 a tonne.
Oil prices jumped to near eight-year highs. Brent crude, the global oil benchmark, rose as high as $113.94 a barrel, the highest since June 2014, and has been trading around $111 for most of the day. It has pared some of the gains since then while US light crude is 2.6% higher at $106.1. Brent has gained some 40% so far this year.
ED&F Man Capital Markets analyst Edward Meir told Reuters:
Oil has been pushing higher on growing perceptions that Russian oil is unable to be ‘transacted’. Although oil is not technically under sanction, traders are understandably nervous about taking delivery of Russian crude, let alone storing, shipping, and ultimately selling it.
Natural gas prices have also soared, with the Dutch April gas contract hitting a new record high of €185 per megawatt hour, and is currently trading 41% higher at €171.19 per megawatt hour. British wholesale gas is 35% higher at 390.79p per therm after touching 398.05p per therm, close to the record of 450p seen last December.
European coal prices for 2023 rose to a record $260.5 a tonne on fears of shortages in Europe, heavily relies on on Russia for its coal and gas.
The Russian steel producer Severstal said it had suspended supplies to the EU due to sanctions on its shareholders.
The average cost of a litre of petrol at UK forecourts was at a fresh high of 151.67p on Tuesday, up from 151.16p on Monday, according to the data firm Experian Catalist. The average cost of a litre of diesel is also at a record high, reaching 155.23p.
RAC’s fuel spokesperson, Simon Williams, said: “If oil does stay at this level, the journey to an average unleaded price of 155p may be far too quick.”
Wheat prices reached hit $10.59 a bushel, the highest since March 2008. Corn prices rose to the highest since December 2012.
On the stock markets, the FTSE 100 index index has closed 99 points higher at 7,429.56, a 1.4% gain. Germany’s Dax has finished the day 95 points higher at 14,000, a 0.7% rise, while France’s CAC rose 1.6% to 6,498 and Italy’s FTSE MiB gained 0.7% to 24,534.
The Moscow stock exchange was closed for a third day, but the Russian rouble plunged to a new record low of 110 per dollar in Moscow (outside Russia, it hit a record low of 120 per dollar on the EBS electronic trading platform on Monday).
Here are some of our main stories:
A cargo of oil from Russia is en route to a British port where it is scheduled to arrive on Wednesday evening, due to a loophole in the ban imposed this week by the government in response to Vladimir Putin’s invasion of Ukraine.
The Department for Transport said on Tuesday it had implemented a ban closing British ports to all ships that are Russian-owned, operated, controlled, chartered, registered or flagged. However, the department has confirmed that the prohibition does not cover the origin of the cargo.
Roman Abramovich has put Chelsea up for sale and the Swiss billionaire Hansjörg Wyss has said he is part of a consortium interested in buying the club.
Thank you for reading. We’ll be back tomorrow. Bye! – JK
Updated
DfT: Russia can still send oil and gas to UK despite port ban
In case you were wondering: Russia can still send oil and gas to Britain despite a ban on Russian vessels docking at British ports, according to the Department for Transport. This is because prohibition on Russian ships doesn’t cover the origin of the cargo.
Yesterday the UK passed a law that banned all ships that have any connection to Russia from entering its ports following Russia’s invasion of Ukraine. This applies to all ships that are Russian owned, operated, controlled, chartered, registered or flagged.
However, the DfT said the sanctions were focused on the vessel, not its cargo. This means that ships registered with other countries can still transport Russian oil or liquefied natural gas to Britain.
Updated
