The Daily Chase: Commodity prices continue to soar; Couche-Tard hits pause on Russia

The global surge in commodity prices is continuing today. Take your pick, with just about everything trading higher.

The global surge in commodity prices is continuing today. Take your pick, with just about everything trading higher. Our eyes go straight to the price of oil, with West Texas Intermediate crude climbing as much as 12.8 per cent to hit its highest level since July of 2008. Brent crude has been up 18 per cent this morning, and we’ll see what happens when Western Canadian Select starts trading after closing at US$102.57 last week. U.S. Secretary of State Antony Blinken said on CNN yesterday there’s a “very active discussion” with allies about banning Russian oil imports. And it looks like the White House is prepared to go it alone if necessary; our Bloomberg News partners are reporting the U.S. is mulling its own ban in the absence of a consensus. Which inevitably leads back to questions about U.S. President Joe Biden’s decision to effectively kill Keystone XL. The pocketbook dynamics are important, particularly in a mid-term election year: the U.S. national average gas price is US$4.065 per gallon this morning, according to AAA. In Canada, the average price is $1.77 per litre, according to CAA.

MORE COMPANIES HITTING PAUSE ON RUSSIA

Starting domestically, Alimentation Couche-Tard announced this morning it’s suspending operations in Russia. The convenience store and fuel station operator has 38 stores in the country. Maple Leaf Foods Chief Executive Michael McCain said in a tweet yesterday that his company is adopting a policy of no commercial activity with Russia until troops pull out of Ukraine (it should be noted there’s no indication in Maple Leaf’s annual report of its exposure to Russia and the company’s media team hasn’t responded to my request for more information). McCain also called for a “total isolation of the brutal aggressors.” Internationally, Visa and Mastercard said over the weekend they’re halting service in Russia, while Netflix and TikTok made similar moves. And that’s just scratching the surface.

BANK DOWNGRADES

Gabriel Dechaine at National Bank of Canada Financial Markets has downgraded Bank of Montreal and Toronto-Dominion to sector perform and trimmed his price targets on both stocks. The common denominator in the downgrades is a view that downside risks are becoming more pervasive despite the long-term payoff from their respective takeovers in the U.S.

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