The barrel of Brent oil marks new highs of the last eight years, when Russia annexed the Ukrainian region of Crimea.

The barrel of Brent oil marks new highs of the last eight years, when Russia annexed the Ukrainian region of Crimea.

The barrel of Brent oil marks new highs of the last eight years, when Russia annexed the Ukrainian region of Crimea.

War drum roll on Europe’s eastern border. Russia began bombing Ukraine and the markets received the impact with crushing force. The energy raw materials they were placed among the most marked assets, with increases of up to 63% for natural gas and oil above 100 dollars per barrel.

The heavy energy dependency of Western Europe of Russian exports, which mostly pass through Ukraine on their way to the west, was the cause of this rise in prices. So much so, that the prices reached in some futures markets threaten to cause a serious problem for the accounts of many statescompanies and households, which would have to face much higher bills than they estimated.

The distinct possibility that supplies from Russia could be cut off or restricted, plus the effect of sanctions such as the goodbye to the Nord Stream 2 pipeline project, led to the future of natural gas soaring with a force rarely known. The increase was up to 63% in its European reference -which at the close softened to around 35%- and more than 6% in the US.

Aftermath of a Russian bombardment of a Ukrainian military post.

Aftermath of a Russian bombardment of a Ukrainian military post.
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For his part the Petroleum rose by more than 8% and the price of Brent exceeded 100 dollars per barrel. A slightly lower level at the close, which meant a price 66% higher than what the Spanish Government estimated in its current General State Budgets. And, in addition, maximums of the last eight years.

You had to go back to the year in which Russia proceeded to invade and annexation of the Ukrainian region of Crimea to see Brent trading above 100 ‘greenbacks’. And the effect extended to the West Texas Intermediate barrel as well (WTI), the benchmark in the US, where, between increases of 7%, this level was also reached in intraday highs.

Gold: safe haven

Also shot the Prayed, active shelter par excellence in times of uncertainty. An ounce of the precious metal became more expensive by up to 3% and $1,975 was exceededa level not seen since August 2020. Then, in the midst of the Covid-19 pandemic, investors ran for bullion to shelter their investment.

The increase in the price of this scarce raw material was the most vertical since January 2021. And, in addition, it was repeated in other precious metals such as silver, with increases of 4% that placed the ounce close to 25.7 dollars. They also raised the platinum (+3%) and the palladium it exceeded 2,700 dollars between increases of 10%. In all cases, the rally was reduced after the close of the European stock markets.

Impact on agriculture

The situation was also replicated in agricultural raw materials, since both Ukraine and Russia are prominent world exporters. The wheat, whose global production is concentrated in about a third in these two countries, added increases of 6%. And this percentage was added to the price escalation that had already been dragging on in recent weeks.

The fear of scarcity was also perceived in the corn, with gains of up to 7% on the Chicago CME futures market. The rise was repeated, although more moderate, in other products such as soy wave oatmeal.

drop in cryptocurrencies

Apart from this trend, the bitcoin it sank to $34,400 with declines close to 10%, in line with other assets considered more risky. A clear correlation that several international financial institutions have recently been warning about.

In this way, with the exception of the episodes of comebacks against the current in the midst of the confinement of Europe, the one that was presented as ‘digital gold’ once again completely distanced itself from the group of those considered safe-haven assets. The same thing happened with the ethereumwith drops of more than double digits that took its graph towards the level of 2,300 dollars.

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