(Bloomberg) -- Commodities extended their tremendous rally as Russia’s invasion of Ukraine continues to roil global markets and fuel fears of supply crunches.
Tensions rose on Friday after Russia escalated its assault by attacking a Ukrainian nuclear plant, the biggest in Europe. Prices from crude to aluminum and wheat soared, as commodities stage their most stunning weekly surge since 1974 and the days of the oil crisis.
Russia’s growing isolation is choking a major source of energy, metals and crops, sparking fears of prolonged shortages and sharper global inflation. Traders, banks and shipowners are already avoiding business with Russia because of the difficulty in securing payments, while shipping lines are canceling or not taking bookings from the region.
West Texas Intermediate oil jumped almost 5% to extend gains this week. Financial sanctions slapped on Russia have prompted buyers to shun its crude. Base metals also rallied further after the LMEX Metals Index, which tracks six major contracts, surged to a record on Thursday.
Soaring energy prices have added to the momentum by pushing up costs. Aluminum, one of the most energy-thirsty metals, rose as much as 3.6% to $3,850 a ton on the London Metal Exchange, a fresh record. Copper is also closing in on its all-time high.
Wheat soared to the highest level since 2008 on deepening fears of a global shortage as the Ukraine war cuts off about a quarter of the world’s exports of the staple used in everything from bread to cookies and noodles. Futures jumped by the exchange limit in Chicago, rising 6.6% to $12.09 a bushel.
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