IIR's March 22 Market Scorecard Brings You Breaking Geopolitical News

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Researched by Industrial Info Resources (Sugar Land, Texas)--Stay current with the latest geopolitical events, and more importantly, instantly connect to how these events may impact you and your business strategies.

Event	MarCon*	IIR Comment	Outlet	IIR News
Ukraine War to Continue to Drive Oil Prices Higher, Analysts Say		The war in Ukraine will likely keep crude oil prices high, analysts say, but further gains could be stemmed by producers boosting output to take advantage of those prices or by consumers cutting back. Volatility reigned last week, with West Texas Intermediate swinging from more than $120 the previous week to the mid-$90s before settling around $100 per barrel by the end of the week. Even still, the U.S. benchmark is down 10 percent from recent highs. Crude oil prices came under pressure early last week from signs that China was coping with another serious outbreak of COVID-19. Lockdowns in the second-largest economy will almost certainly lead to a decline in crude oil demand. According to Norwegian consultancy Rystad Energy, social restrictions could dampen demand by about 500,000 barrels per day. Al Salazar, managing director at energy data firm Enverus, said the war will drown out any market noise for the foreseeable future, however. "Ultimately, the bullets and bombs haven't stopped, nor have the inventory draws. And we are skeptical that Russian sanctions will be removed anytime soon," he said. "For us, we're still bullish on oil from here."	Houston Chronicle	Does the U.S. Ban on Russia Fossil Fuels Even Matter?
Crude Oil Forecast: Headlines Hit Prices but Oil is Structurally Underpinned For Now		The crude oil outlook remains obscured behind an opaque fundamental backdrop with headlines and positioning driving unhinged price moves. Sanctions on Russian oil supply continue to create unknown consequences. The International Energy Agency (IEA) reported this week that up to a third of Russian oil exports are at risk in April. 8 million barrels per day (BBL/d) were exported in January and the IEA see 2.5 million BBL/d of oil and crude oil at risk for next month. Meanwhile, a number of OPEC exporting nations have indicated that the cartel should ramp up production to alleviate supply issues, with Libya joining the chorus this week. While the supply side grapples with avoiding demand destruction, some structural features of the oil market might have some clues, namely backwardation and volatility. Backwardation remains in play in the oil market, indicating that further easing of prices to below pre-war levels may not appear likely in the near term... With the narrative around developments from Ukraine dramatically impacting oil prices, it is hard to see volatility for crude settling down anytime soon. A measure of volatility on the Chicago Board Options Exchange (CBOE) shows that volatility could easily spike higher. While it is currently elevated, it remains below previous episodes of wild price swings.	DailyFX	Despite an Apparent Administration Push, Can U.S. Shale Make Up for Banned Russian Oil?
The World's Biggest Commodities Markets Are Starting to Seize Up		It's getting harder to deal in some of the world's most important commodities as everything from geopolitical turmoil to exchange snafus prompt traders to rush for the exits, rapidly draining liquidity. Prices of materials like crude, gas, wheat and metals have become alarmingly erratic as a gulf emerges between buyers and sellers who are facing big financing strains. Markets have been roiled on fears about Russia's invasion of Ukraine constraining commodities flows, though in many cases rallies were quickly followed by a drop in prices. The London Metal Exchange's embarrassing weeklong suspension of nickel trading is an example of a market grinding to a halt after extreme price moves. Liquidity is nonexistent as some dealers try to close positions amid a glitchy reopening of trade in the critical metal. The volatility is particularly difficult to navigate because some moves appear to defy fundamentals, with hedge funds exiting long-term bullish bets just as supply looks the tightest in years. Merchants are finding it harder to snap up any cheap cargoes because of huge margin calls and credit line caps. "Volatility as an asset class is enormous now, and on top of that you have some serious operational issues," said Ilia Bouchouev, a Pentathlon Investments partner and adjunct professor at New York University. "It's a vicious loop where volatility forces companies to reduce positions, which means what's left in the market is forced trading. That in turn contributes to even more volatility."	Bloomberg	Ukraine War Western Sanctions Necessitating New Metals & Minerals Supply Chains
Charting the Global Economy: Fed Lifts Rates as Inflation Builds		Federal Reserve officials this week embarked on a campaign of tighter monetary policy with the first increase in the U.S. benchmark interest rate since 2018 as inflationary pressures build. The Bank of Japan is choosing a different course. Japanese central bankers opted to keep policy stimulative in order to support an economy still contending with the coronavirus. Meantime, global inflationary pressures persist as Russia's war in Ukraine drives up commodities costs. The Fed kicked off a campaign of interest rate hikes that's set to be the most aggressive since the mid-2000s. After raising rates by a quarter point and signaling six more increases this year, Fed Chair Jerome Powell told reporters that inflation is too high, the labor market is over-heated and price stability is a "pre-condition" for the central bank as it tackles the hottest price pressures in 40 years.	Bloomberg	Uncertainty Remains for Oil Supplies, but What About for Prices?
Ukraine War Threatens to Cause a Global Food Crisis		The war in Ukraine has delivered a shock to global energy markets. Now the planet is facing a deeper crisis: a shortage of food. A crucial portion of the world's wheat, corn and barley is trapped in Russia and Ukraine because of the war, while an even larger portion of the world's fertilizers is stuck in Russia and Belarus. The result is that global food and fertilizer prices are soaring. Since the invasion last month, wheat prices have increased by 21%, barley by 33% and some fertilizers by 40%. The upheaval is compounded by major challenges that were already increasing prices and squeezing supplies, including the pandemic, shipping constraints, high energy costs and recent droughts, floods and fires. Now economists, aid organizations and government officials are warning of the repercussions: an increase in world hunger. The looming disaster is laying bare the consequences of a major war in the modern era of globalization. Prices for food, fertilizer, oil, gas and even metals like aluminum, nickel and palladium are all rising fast - and experts expect worse as the effects cascade. "Ukraine has only compounded a catastrophe on top of a catastrophe," said David M. Beasley, the executive director of the World Food Program, the United Nations agency that feeds 125 million people a day. "There is no precedent even close to this since World War II."	New York Times	Global Food & Beverage Leaders Cut Ties with Russia
Weekly Recap: 3/12-3/19		A super bouncy ball is what these energy commodities remind me of at this time. With the question on everybody's lips: "Which way is this ball going to end up bouncing and into whose hands?" For oil prices, this ball is bouncing to $110 and likely to broach $120 and beyond, forcing some traders to run for the exits as volatility runs rampant--in fact to the point that global commodity markets are "seizing up." And, as one knows, the world is dealing with hyperinflation as central bankers wrestle with what steps to take - in the U.S., the Fed is embarking on a campaign of interest rate hikes; whereas other central banks like Japan are choosing to keep their policy more stimulative in nature. But it is not just a war, high commodity prices, and inflationary pressures that require resolution; the world is poised to step into a food crisis which likely will be catastrophic in nature... the ball bounces on...
*MarCon (Market Condition 1-5, with 5 being the highest impact) indicates directional bias or price effect for the relevant commodity (Oil, Natural Gas, Chemicals, etc.) and is graded by our team of experts here at IIR.

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