One year after Russia's invasion of Ukraine, key commodities sit well off post-war highs

Friday marked the one-year anniversary of war between Russia and Ukraine. Along with the devasting physical destruction and the incalculable human toll, the invasion of Russian forces into Ukraine on Feb. 24, 2022, also sent shockwaves into the commodities market.


Load Error

The immediate aftermath of the invasion sent the key commodities of crude oil (CL1:COM), natural gas (NG1:COM) and wheat (W_1:COM) sharply higher, driving gains in exchange traded funds tied to those markets. However, even as fighting continues, those commodities have come well off peaks reached last summer and are now showing declines on a one-year basis.

Crude Oil:

Russia, one of the world’s leading oil export nations, watched the price of oil spike at the start of the war. At its peak, oil topped $130.50 a barrel and consistently held above $100 per barrel until August. However, the price retreated from its summer peaks into the final weeks of 2022, reaching a level of $70.08 per barrel on Dec. 9, before turning higher again. 

Currently, oil hovers near the $76 per barrel level, which is 18.5% lower on a one-year basis and more than 40% below its post-invasion peak.

Oil ETFs: United States Oil Fund LP (NYSEARCA:USO), United States Brent Oil Fund LP (BNO), ProShares Ultra Bloomberg Crude Oil (NYSEARCA:UCO), Invesco DB Oil Fund (DBO), ProShares UltraShort Bloomberg Crude Oil (SCO), ProShares K-1 Free Crude Oil Strategy ETF  (OILK), and United States 12 Month Oil Fund LP  (USL).

Here’s a one-year chart of oil:

© Provided by Seeking Alpha

Natural Gas:

Similar to oil, natural gas is another key commodity that Russia exports to world markets. Russia has historically been one of the largest suppliers of gas to European nations such as Germany, Poland, Slovakia and others.

At the start of the war, natural gas prices hovered near $4.57/MMBtu. From there, it surged 119% to $10.03/ MMBtu by late August.

Since its peak, natural gas prices have come down dramatically and is now sitting near $2.34/ MMBtu. This is down 48.7% on a one-year basis.

Natural Gas ETFs: United States Natural Gas Fund LP (NYSEARCA:UNG), VelocityShares 3X Long Natural Gas ETN (UGAZF), ), ProShares Ultra Bloomberg Natural Gas (BOIL), ProShares UltraShort Bloomberg Natural Gas (KOLD), United States 12 Month Natural Gas Fund LP (UNL), and First Trust Natural Gas(FCG).

See below a one-year chart of natural gas:

© Provided by Seeking Alpha

Wheat: Both Russia and Ukraine are among leading suppliers of the grain and together represent nearly a third of the world’s grain exports. The direct conflict between the two nations placed added pressure on the commodity.

Once the war broke out, wheat prices exploded higher, eventually showing a 69% topside move at their peak. However, as the war has grinded on, wheat prices have come down and are now lower by 13.7% on a one-year basis.

Wheat ETFs/ETNs: Teucrium Wheat Fund (NYSEARCA:WEAT), iPath Series Bloomberg Grains Subindex Total Return ETN (JJGTF), iPath Series B Bloomberg Agriculture Subindex Total Return ETN (JJA), and Invesco DB Agriculture Fund (DBA).

See below a one-year chart of wheat prices:

© Provided by Seeking Alpha

Now read: Oil Fails To Gain Traction As Q1 Builds Continue

Continue Reading