EUROPEAN COMMODITIES UPDATE: Crude and metals rises on a softer post-FOMC minutes Dollar

Crude Oil: WTI Apr U/C, Brent Apr U/C

• A choppy session for crude prices thus far with the complex subdued in early European trade after experiencing gains in late APAC trade, and following yesterday's indecisive performance amid geopolitical uncertainty due to the recent US turnaround in foreign policy and with prices contained after bearish private sector inventory data.


• Sentiment overnight for the complex could've been supported by Chinese sentiment amid reports US President Trump is eying a bigger and better trade deal with China that would include substantial investment and commitments for China to buy more US products.


• Desks such as ING also flag a few factors this week that affected/continue to affect the crude complex: 1) disruptions in North Dakota due to extremely cold weather, with the North Dakota Pipeline Authority suggested production is down between 120-150k BPD, likely lasting till the weekend. 2) EU sanctions on Russia which almost doubled sanctions on Russian shadow fleets, although ING suggests "While similar sanctions from the US on Russia have not led to a significant drop in export volumes, floating storage has increased. This has buyers less willing to accept sanctioned vessels." 3) Restart of flows from Iraq's Kurdistan region which could reintroduce some 300k BPD of flows, albeit it is unclear how Iraq can adhere to OPEC+ targets upon resumption of flows.


• Ahead, a delayed DoE (amid Presidents' Day on Monday) will be released at 17:00 GMT/ 12:00 EST. As a reminder, US Private Inventory Data (bbls): Crude +3.3mln (exp. +2.2mln), Distillate -2.7mln (exp. -3.5mln), Gasoline +2.8mln (exp. +0.8mln) Cushing +1.7mln.


• WTI currently resides in USD 71.73-72.34/bbl range while Brent resides in a 75.72-76.30/bbl range.

Nat Gas: Dutch TTF -0.8%, US Nat Gas -1.8%

• Subdued action in natural gas with prices in Europe subdued by the prospect of milder weather in the upcoming period.


• Earlier today, a Russian attack damaged Ukrainian gas production facilities, according to the Energy Minister.


• Elsewhere, Norwegian Prelim Gas Production (Jan) 10.7bcm (prev. 11.2bcm).

Precious Metals: Gold +0.7%, Silver +1.1%, Palladium +1.4%

• Precious metals trade higher across the board amid the ongoing geopolitics, tariffs, USD weakness from FOMC minutes, and broader momentum after spot gold hit a fresh record high this morning.


• Spot gold topped USD 2,950/oz to a USD 2,954.95/oz peak at the time of writing (vs low 2,933.85/oz), with the yellow metal rising above yesterday's USD 2,947.08/oz peak.


• IFR flag spot gold support at USD 2,920/oz and then between USD 2,890-2,895/oz.

Base Metals: 3M LME Copper +0.9%

• Base metals trade higher across the board following a choppy APAC session but with the complex later supported by the softer Dollar and as sentiment during early European trade tilts higher.


• Mining giants Anglo American and Rio Tinto reported earnings and market outlooks, with the former suggesting "Near-term market conditions are expected to remain challenging in 2025 as polished pull-through remains subdued and industry players continue to manage inventory levels. In the medium-term, production cuts announced by a number of producers coupled with stabilisation of demand in China and normalisation of industry inventory levels are expected to result in modest rough price growth", whilst the latter offered little in terms of macro commentary.


• 3M LME copper resides in a 9,452.95-9,547.00/t range at the time of writing.


• Dalian iron ore prices ended daytime trade at +2.3% with traders citing strong steel consumption from China.


• Aluminium continues to be supported by the EU's 16th sanction package against Russia, with LME prices rising above USD 2,700/t yesterday and printing a high of USD 2,721.45/t at the time of writing, although ING posits that any impact from sanctions will likely be limited given the fall in EU imports of Russian aluminium.

20 Feb 2025 - 10:15- MetalsGeopolitical- Source: Newsquawk