A war rally in commodities

The war in Ukraine triggered the rise in commodity prices.

Many commodities, from aluminum to wheat to oil, are at their highest levels in many years. Raw material prices recorded their biggest weekly increase since 1974.

The isolation of Russia, a major player in energy, grains, and raw materials, raises concerns that there will be shortages of supply and that global inflation will rise further. Many institutions, investors, and companies avoid doing business with the country due to the difficulty of securing payment. Some shipments from the region have been cancelled.

The price of a barrel of West Texas-type crude oil rose by about 5 percent today after Russia attacked the nuclear facility in Ukraine as the war continued. The price is up 20 percent this week. JP Morgan predicted that if the supply shortage in Russia continues, Brent oil could close the year at $185 per barrel. The price of Brent oil is around $112 today.

Wheat prices are also hovering at 14-year highs on concerns about supply shortages, futures contracts on the Chicago Stock Exchange are trading at $12.09 per bushel, up 6.6 percent.

Base metals continue to rise. Aluminum rose 3.6 percent to $3,850 per ton on the London Metal Exchange, while copper prices hit an all-time high.

The negative effects of the increase in commodity prices may also be felt on global growth and inflation.