EUROPEAN COMMODITIES UPDATE: A softer dollar supports oil and precious metals, but base metals trad mixed on tariff threats

Crude Oil: WTI Mar +0.4%, Brent Mar +0.4%

• Slight upward bias across the crude complex as the dollar pulls back from overnight highs and sentiment across Europe is now firmer.


• That being said, upside is capped by tariff threats from US President Trump who flagged a 10% levy on China in retaliation to fentanyl flows from the country, whilst it noted Europe could be hit by tariffs too.


• Elsewhere, geopolitics see the Israel-Hamas in Gaza ceasefire hold up for now but reports suggested the IDF operation in the West Bank has expanded, whilst on Hezbollah, "Israel is trying to extend the 60-day deadline for the withdrawal of forces from Lebanon by three days", according to Lebanese press cited by Israeli journalist Kai.


• Citi Brent outlook revisions (USD): Q1-2025 75/bbl; Q2-2025 68/bbl; Q3-2205 63/bbl; Q4-2025 60/bbl. 2025 average of 67/bbl.


• WTI Mar sits in a USD 75.28-76.24/bbl range while Brent Mar resides in a USD 78.81-79.70/bbl parameter.

Nat Gas: Dutch TTF -0.5%, US nat gas +0.5%

• European prices take a breather after surging yesterday, which saw a 4.5% settlement higher above EUR 50/MWh.


• Catalysts largely weather-related developments, particularly stateside.


• Citgo said it implemented a cold weather response at all three refineries which includes extra operators, maintenance crafts and management personnel in the refineries around the clock.


• Port Houston said all eight public facilities will remain closed for Tuesday and Wednesday due to cold weather conditions.


• Port Freeport said limited activity is expected due to weather conditions in the Gulf Coast area in Texas.


• Analysts at ING also flag that "Germany is potentially looking at subsidising the refill of gas storage ahead of the 2025/26 winter, a discussion we are likely to see more of across the EU with the TTF forward curve providing little incentive for players to store gas for the next winter with summer 2025 prices trading at a premium to 2025/26 winter prices."

Precious Metals: Gold +0.5%, Silver +0.4%, Palladium +0.6%

• Firmer across the board the back of the softer dollar, with the schedule today relatively light aside from equity earnings.


• Gains across the metals are relatively broad-based with no standout performers.


• Spot gold extends on gains to trade in a USD 2,741.96-2,762.41/oz range after topping yesterday's USD 2,746.05/oz top, and matching the high set on 1st November 2024.

Base Metals: 3M LME Copper -0.4%

• Base metals are mixed despite the softer dollar and constructive risk mood, but likely amid China's underperformance amid the US tariffs threats, whereby US President Trump said they are talking about a 10% tariff on China for sending fentanyl.


• Copper futures mildly pulled back after the prior day's intraday rebound with prices not helped by the underperformance in China.


• The world refined copper market was in a 131k MT deficit in November 2024, according to ICSG.


• 3M LME copper resides in a narrow USD 9,206.50-9,279.50/t range.

22 Jan 2025 - 09:55- MetalsEU Research- Source: Newsquawk