• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 3 days Does Toyota Know Something That We Don’t?
  • 6 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 3 days World could get rid of Putin and Russia but nobody is bold enough
  • 2 days America should go after China but it should be done in a wise way.
  • 6 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 5 days China is using Chinese Names of Cities on their Border with Russia.
  • 6 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 5 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 6 days Putin and Xi Bet on the Global South
  • 6 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 7 days United States LNG Exports Reach Third Place
  • 7 days Biden's $2 trillion Plan for Insfrastructure and Jobs

Natural Gas And Wheat Prices Jump On Russia Turmoil

European natural gas prices and the wheat futures in Chicago rose on Monday, following a chaotic weekend in Russia where the Wagner mercenary group staged a short-lived revolt and a march on Moscow that never reached the Russian capital.

Early on Monday, Chicago wheat futures gained 2.5%, while European natural gas prices jumped by more than 5%. Oil markets, however, were calmer and prices were only slightly inching higher on Monday morning ET.

The front-month futures at the TTF hub, the benchmark for Europe’s gas trading, have risen in recent weeks, due to maintenance on Norway’s gas processing plants. The chaos in Russia added volatility to the market on Monday and as of 11:16 GMT, the July contract traded at $37.51 (34.40 euros) per megawatt-hour (MWh), up by 5% on the day. The price of Europe’s benchmark gas is now much higher than the 25 euros/MWh from three weeks ago.

Oil prices, on the other hand, paired earlier stronger gains and were up by around 0.5% as of 7:35 a.m. EDT.

Still, analysts believe that even if a major supply outage has been averted with the quick end to the Wagner mutiny, geopolitical risk premiums in the oil market, and other commodity markets, will rise.

“While the immediate supply risks have disappeared, the market will likely have to start pricing in a larger risk premium for oil given the growing instability in Russia,” ING strategists Warren Patterson and Ewa Manthey said on Monday.  

“How much of a risk premium will really depend on how the aftermath of the failed insurrection is dealt with.”

“Collectively the world would have breathed a sigh of relief at least on the oil market side that the disruption in the Russian state did not go through the worst that people feared,” Alok Sinha, Standard Chartered global head of oil & gas and chemicals, told CNBC on Monday.

Gold should be an asset class to watch in the coming days, according to Kelvin Wong, senior market analyst OANDA.

“Gold, a traditional safe haven asset that tends to benefit in light of major geopolitical risks upheaval in the past has exhibited some interesting price actions movement from a technical analysis perspective,” Wong said on Monday.


By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News