EUROPEAN COMMODITIES UPDATE: Commodities remain pressured by the fragile risk appetite and firmer Dollar

Analysis details (10:02)

• 
  WTI and Brent April futures are consolidating following another hefty session of losses on Wednesday which saw both benchmarks settle lower by almost USD 2.50/bbl apiece. The bearish momentum yesterday was despite a lack of an obvious catalyst while risk appetite was buoyed, and the Dollar firmed. Sentiment across the complex remains dampened by the hawkish-leaning FOMC minutes and the delayed Private Inventory report – which showed another much larger-than-expected build in headline crude (+9.9mln vs exp. +2.1mln) whilst the internals were also bearish – with traders on the lookout for today’s EIA at 16:00GMT/11:00EST. WTI resides around the USD 74/bbl mark (73.83-74.55/bbl intraday range) while its Brent counterpart sits just under USD 81/bbl (80.40-81.31/bbl range). Eyes remain on the geopolitical sphere as February 24th marks one year since Russia’s invasion of Ukraine, with reports this morning suggesting heavy explosions in the Donbas area, and Mariupol area, and Russian military reinforcements arrive near Chernihiv province, in the north of Ukraine. Analysts at ING suggest the “Weakness in the oil market is not restricted to the flat price - the prompt ICE Brent timespread has also weakened, although remaining in backwardation. A weaker time spread also ties in with the view of a better-supplied oil market in the short term.”


• 
  Natural gas futures diverge with US Henry Hub futures trading around USD 2.35/MMBtu after dipping under USD 2.00/MMBtu yesterday, with some citing the rebound on expected state-side cold weather. Dutch TTF prices meanwhile remain under EUR 50/MWh but within recent ranges.


• Over to metals, spot gold has drifted towards the bottom of its intraday range as the Dollar picked up this morning, with the intraday low just under yesterday’s USD 1,823.56/oz trough, whilst the next level to the downside USD 1,818.97/oz (17th Feb low) ahead of USD 1,813.40/oz (30th Dec 2022 low). Base metals are softer across the board amid the firmer Dollar and flimsy risk appetite. 3M LME copper trades closer to the bottom of a USD 9,033-9,112/t range while LME lead and nickel lead the losses, with the latest data from the International Nickel and Study Group showing that the global nickel market remained in supply surplus for December last year and 2022 as a whole.

23 Feb 2023 - 10:15- MetalsEU Research- Source: Newsquawk