COMMODITIES-Oil soars, nickel breaks above $100,000 a tonne
(Adds details on LME suspending nickel trading and latest market activity)
By Nina Chestney
LONDON, March 8 (Reuters) - Commodity prices surged on Tuesday with Brent crude soaring on news that the United States and Britain will ban or phase out Russian oil imports, and nickel hitting record highs above $100,000 a tonne.
The London Metal Exchange (LME) suspended nickel trading on all venues after prices jumped nearly 400% from Friday's close. The exchange said market uncertainty made it inappropriate to announce a date to resume trading, but it was unlikely before March 11.
"Nickel is clearly trading in crisis mode," ING analysts said. "Fundamentals, though supportive of stronger prices, do not justify this frenzy." The market has long faced structural issues, they added.
Gold extended its blistering rally towards an all-time high, while worries over a palladium supply shortfall due to sanctions on Russia, the top producer of the auto-catalyst metal, kept its price near all-time highs.
Brent crude settled up 4% near $128 a barrel.
Russia is the world's largest exporter of natural gas and the second largest exporter of crude oil and petroleum products.
It supplies more than a third of Europe's energy and is also a major producer of fertilizer, wheat, aluminium, nickel, palladium, platinum and coal.
Western sanctions have cut Russia off from international trade and financial markets to a degree never before imposed on such a big economy.
U.S. President Joe Biden announced a U.S. ban on Russian oil and other energy imports, ramping up a pressure campaign on Moscow in retaliation for the invasion of Ukraine.
Britain said it would phase out imports of Russian oil and oil products by the end of 2022, which it said would give the market and businesses more than enough time to find alternatives to the imports, which make up 8% of demand.
Oil major Shell has stopped buying Russian crude and said it would phase out its involvement in Russian hydrocarbons from oil to natural gas, becoming one of the first major Western oil companies to abandon Russia entirely.
Goldman Sachs hiked its price forecasts for Brent oil saying the world could be facing one of "largest energy supply shocks ever" because of the Ukraine crisis, while Barclays said prices in its worst-case scenario could top $200 a barrel.
Global gas markets remained volatile after hitting record highs on Monday. Analysts said an embargo on Russian gas exports seems unlikely but Russia has threatened to retaliate for Western sanctions by halting flows through the Nord Stream 1 pipeline.
Russian gas delivered through the Yamal-Europe pipeline via Poland was flowing westward into Germany on Tuesday, and flows into Slovakia via Ukraine remained at recent high levels, pipeline operator data showed.
The European Commission published plans on Tuesday to cut EU dependency on Russian gas by two-thirds this year and end its reliance on Russian supplies of the fuel "well before 2030".
Meanwhile, Chicago Board of Trade (CBOT) wheat futures temporarily dropped by expanded exchange-imposed limits in volatile trading after touching a 14-year high. The market is wrestling with a supply upheaval following Russia's invasion of Ukraine, a fellow grain exporter.
Russian President Vladimir Putin signed a decree restricting the import and export of certain goods and raw materials "to ensure the security of the Russian Federation", Interfax news agency said. It did not specify which products would be restricted.
Many shipping companies have suspended sailings to affected ports on the Black Sea due to the conflict and the impact of Western sanctions, adding to pressures for traders in Russian and Ukrainian grain.
But CBOT soybean futures were strong, rising 2% on demand for U.S. exports and the gains in crude oil.
(Reporting by Nina Chestney, Pratima Desai, Peter Hobson, Gus Trompiz, Jonathan Saul, Nigel Hunt and Tom Polansek; Editing by Jan Harvey, Jonathan Oatis and Mark Heinrich)
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