CHART OF THE WEEK 📈
Commodity prices are cooling down again; after their dramatic rise post Russia’s aggression towards Ukraine.
Russia is a major commodity supplier, and its invasion of Ukraine sparked fears of heavy sanctions and supply chain disruptions, leading to a sharp spike in commodity prices.
Russia is amongst the top 5 exporters of oil, the EU depends on Russia for nearly half its natural gas requirements, Russia and Ukraine constitute to a third of the global wheat exports, and Russia is also a key supplier of metals like nickel and palladium.
However, after all the scare, a few things have helped commodity prices to reverse their fall:
Increased hopes of a ceasefire
Supply chain issues being not-as-grave-as initially thought. Take oil for example, US dependency on Russian oil being as low as 7%, combined with higher inventory levels have eased much of the pressure.
A slowdown of demand from China as it imposed one of its largest lockdowns, in line with its zero-case policy on COVID