Highlights

• The global commodity market recorded a volatile week, ending on 18 February 2022.
• Natural gas recorded a weekly gain of 8.05% while crude oil prices tumbled.
• Aluminium prices also recorded substantial gains to reach all-time-high levels on Friday.
• Prices of platinum surged to 13-week high levels amid persistent concerns over the Russia-Ukraine conflict.

Last week, the global commodity market witnessed significant volatility as market players weighed the stance of the US central bank and rising geopolitical tensions. Russia has been amassing troops along the Ukraine border, fuelling worries of invasion. At the same time, the ‎Federal Open Market Committee (FOMC) minutes released last week indicated that the US central bank could raise interest rates as early as March.

Crude oil prices tumbled at least 1.74% during the last week to record their first weekly decline since early December. Natural gas led the list of top gainers with a weekly gain of 8.05%.

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Among base metals, iron ore recorded one of the biggest drops. The prices of the steel-making raw material at Chinese ports slumped around 3.85% during the last week after Chinese authorities decided to strengthen the market supervision, a move aimed at stabilising commodity prices.

On the flip side, aluminium gained substantially to trade near US$3,313 per tonne, reaching all-time-high levels on Friday on the back of rising geopolitical unrests and rising concerns related to the supply of metal.

Among precious metals, gold and silver both recorded sizeable gains last week on rising demand for both the metals as safe-haven investment amid rising tensions between Russia and Ukraine. Gold gained over 1.98% during the last week. Likewise, prices of platinum also surged to 13-week high levels amid persistent concerns over the Russia-Ukraine conflict.

Against this backdrop, let's skim through a few commodities that were popular among traders in the past week.

Here are a few significant commodities that recorded substantial volatility during the last week.

Crude Oil

Crude oil witnessed huge volatility as prices jumped to fresh seven-year highs but pared all the gains by the end of the week. Both crude oil benchmarks recorded substantial drops last week, with prices of WTI crude oil dipping as much as 3.02%.

The prospect of Iranian oil returning to the market has phased out the supply concerns ignited from the ongoing geopolitical unrest between Russia and Ukraine. The revival of the 2015 Iran deal, if successful, is likely to bring 1Mbpd of oil supply into the market, enough to cool the boiling oil prices.

Natural Gas

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US Natural gas futures rolled between gain and loss cycles to close at US$4.43 per MMBtu on Friday. The volatility in the prices was primarily driven by slight changes in early March weather forecasts. The latest forecasts estimate a colder March than previously expected.

Aluminium

The prices of aluminium reached fresh all-time highs amid rising supply concerns as the latest US-Russia tussle has strengthened the prospects of sanctions on Russia, which is one of the leading metal suppliers in the world, triggering a rush to aluminium stocks at LME warehouses.

Additionally, Chinese production curbs due to Olympics, which was aimed at reducing pollution during games, additionally aggravated supply concerns and jacked up prices during the week gone by. In an effort to host a green Olympics, the country had temporarily suspended the operations at aluminium smelters in Shandong and Henan provinces.