EUROPEAN COMMODITIES UPDATE: Crude attempts a recovery, Dollar weighs on precious metals, and LME sees another nightmare nickel open

Analysis details (10:13)

WTI and Brent front-month futures are firmer but off best levels as the complex continues to nurse some of this week’s earlier losses in what was a volatile week. WTI Apr resides just under USD 104/bbl (vs weekly high 109.72/bbl) whilst Brent May trades hovers around USD 107.50 (vs weekly high 113.15.bbl). The Russia-Ukraine situation remains the focal point, whilst a meeting between US President Biden and Chinese President Xi is slated for 13:00BST/09:00EDT. The Ukrainian situation will likely carry the heaviest weight in this interaction – with China earlier in the week stating they will continue “normal economic trade relations with Russia and Ukraine” whilst also warning the US over their threat to punish firms that circumvent US sanctions. The aim of Washington is for Beijing not to cushion the effects of Western sanctions on Russia. Although no breakthroughs are expected, it will be interesting to monitor the tone from the two sides after the meeting. In terms of the Russia-Ukraine situation itself, Senior EU officials have “an incredibly dire assessment about likely trajectory of Russia's war of aggression in Ukraine over next few weeks”, according to Eurasia's Rahman, but the bar for an energy import ban from Europe against Russia is high. Negotiations are slow and there are fears that Russia is attempting to buy time following little military progress this week. Further, strikes were reported in the western Ukrainian city of Lviv - just over an hour's drive from the Polish border. As a reminder, Ukraine is bordered by four NATO members: Poland, Hungary, Romania and Slovakia. Meanwhile, there has been little recent noise surrounding the Iranian nuclear deal. Elsewhere, spot gold remains subdued by the firmer Dollar but within a band above USD 1,925/oz after briefly dipping under the USD 1,900/oz market on the FOMC release. Meanwhile, LME again sees irregular nickel trade after expanding the nickel futures limit band to 12% from 8%, only for the futures to slump limit down at the open. LME said some trades have gone through below the Nickel limit, such trades will be cancelled.

18 Mar 2022 - 10:13- MetalsResearch Sheet- Source: Newsquawk