COMMODITIES SOARS
Brent crude futures soared 7% to above $130 per barrel on Tuesday, approaching a 2008-high of $139 hit in the previous session, as US President Biden is expected to announce a ban on imports of Russian oil during the press conference at 10:45 am ET. UK prime minister is also due to unveil a plan to cut UK's oil imports from Russia to zero over the coming months. In 2020, crude oil imports from Russia accounted for around 8% of the total in the US and 11% in the UK. Reduced inventories worldwide and a delay in reviving the Iran nuclear deal after Russia demanded trade guarantees from the US was also pressuring prices. Meanwhile, Russia warned it could stop the flow of natural gas through pipelines from Russia to Germany in response to Berlin's decision last month to halt the opening of the controversial new Nord Stream 2 pipeline and warned that if the West goes ahead with a ban, oil prices could hit $300 per barrel.
Heating oil futures traded close to $4.1 per gallon, after hitting a record high of $4.2373 on Monday. Most utilities and their energy trading partners are already cutting exposure to Russian energy goods. The global embargo could cause crude prices to reach $300 a barrel, Russia’s deputy Prime Minister warned, as the country produces roughly 8% of global supplies, which will hard to replace given OPEC+ nations agreed to stick to a planned output increase of 400,000 bpd in April and revival of Iran’s nuclear deal remained uncertain.
Gasoline futures continued rallying to historically high levels, above $3.6 a gallon on Tuesday, after hitting an all-time high of $3.89 in the previous session. Russia’s deputy Prime Minister warned, as the country produces roughly 8% of global supplies, which will hard to replace given OPEC+ nations agreed to stick to a planned output increase of 400,000 bpd in April and revival of Iran’s nuclear deal remained uncertain.
US natural gas futures fell further to $4.6 per million British thermal units on Tuesday, after hitting an over three-month high of $5.10 in the previous session, as investors took a breath amid prospects of lower weather-driven demand after mid-March. Still, stronger overseas demand especially from Europe and Asia prevented further losses. In Asia, LNG spot prices hit unprecedented levels last week in a bid to divert some shipments away from Europe, boosting competition for American LNG cargoes. Domestically, natural gas stocks shrank slightly more than expected last week and sat below the 5-year average.
Uranium futures traded above $51 per pound, not far from the near 10-year high of $51.6 touched on March 2nd amid supply concerns while soaring oil prices and the uncertain future of energy supply in Europe led investors to ramp up bets on fossil fuel alternatives. The US nuclear energy sector produces 20% of the country's electricity, and relies on Russia and its allies for roughly half of the uranium powering its plants. Meanwhile, higher fossil fuel prices and efforts of reducing the dependency on Russian energy enhanced the global outlook for nuclear energy. After the EU is set to to include nuclear energy in its sustainable finance taxonomy, French President Macron said that France would construct as many as fourteen new nuclear plants to reduce its foreign energy dependency while increasing its carbon-free energy production.
