EUROPEAN COMMODITIES UPDATE: Commodities buoyed by the softer Dollar but upside remains capped ahead of ECB

Analysis details (09:24)

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  WTI and Brent front-month futures are firmer intraday after both contracts settled lower by almost USD 4/bbl yesterday following a break out of the multi-month ranges to levels not seen since late 2021. Analysts at ING pin the losses to “Broader market concerns related to the banking sector have weighed on risk assets, while oil is also seeing some soft fundamentals at the moment”, and some desks (including ING) have floated the idea that OPEC+ could intervene to stabilise the market. Building on the “softer fundamentals”, reports by the IEA suggested Russian supplies are holding up better than most had expected despite the G7 and EU measures. WTI resides around USD 68/bbl (vs low 67.52/bbl) while its Brent counterpart trades around USD 74.50/bbl (vs low 73.59/bbl). Today will likely be another day dominated by risk, as equities (alongside Credit Suisse) trim earlier gains and as the ECB looms (Full Newsquawk Preview available in the Research Suite). Elsewhere, gas prices are mixed once again but with price action contained, with US Henry Hub just under USD 2.47/MMBtu and Dutch TTF trundling closer to EUR 40/MWh at EUR 42.40/MWh at the time of writing.


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  Metals are now mostly positive as a function of the softer Dollar. Spot gold holds its head above USD 1,900/oz and well within yesterday’s USD 1,885.79-1,937.39/oz parameter as traders await the ECB. Base metals are mostly firmer intraday and 3M LME copper found support just under USD 8,500/t. In metals-related news, mining giant Glencore has opted not to renew its USD 16bln aluminium deal with Russia’s Rusal – a move aligns with Glencore's policy of not engaging in new business with Russia following the country's invasion of Ukraine. The termination of the contract could provide opportunities for Glencore's rivals in the global aluminium market, as long as they are willing to trade Russian metal, according to reports

16 Mar 2023 - 09:25- Research Sheet- Source: Newsquawk