EUROPEAN COMMODITIES UPDATE: Crude choppy, gas subdued, but metals hold a positive bias

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

• Choppy trade across the crude complex once again after prices tumbled on Tuesday as soft consumer confidence data added fears to the demand side of the equation, with WTI Apr and Brent May settling lower by USD 1.77/bbl and USD 1.81/bbl respectively.


• Thereafter, futures were contained overnight, while the latest private sector inventory data was mixed with a surprise draw in headline crude and an unexpected build in gasoline stockpiles [Crude -0.6mln (exp. +2.6mln), Distillate -1.1mln (exp. -1.5mln), Gasoline +0.5mln (exp. -0.9mln), Cushing +1.2mln]. Some desks suggest that last week's North Dakota outage could've contributed.


• Newsflow for the complex has been light this morning, although a mild dip was seen around the time Trafigura's Global Oil Head Lockock suggested the oil market is pricing out geopolitical risk, and that OPEC will be pragmatic in its approach to oil supply.


• In geopolitics, Russia's Kremlin said expert-level talks with the US are being prepared, with no current plans for a US President Trump/ Russian President Putin call, but may take place if necessary; still interested in implementing economic cooperation in "different" areas. Elsewhere, Taiwan reportedly dispatched forces after China announced 'shooting' drills off the island, says Taipei defence ministry via AFP.


• Analysts at ING suggest "prospects for a peace deal between Russia and Ukraine are improving as the US and Ukraine agree on a minerals deal. It could be signed later this week. This would take us a step closer to Russian sanctions being lifted, removing much of the supply uncertainty hanging over the market."


• WTI Apr resides in a USD 68.85-69.25/bbl range thus far with Brent Apr in a USD 72.40-72.81/bbl parameter.

Nat Gas: Dutch TTF -1.3%, US Nat Gas -0.3%

• Soft trade following a slump yesterday with European gas prices settling some 6% lower.


• Desks suggest the positive noise surrounding a US-Ukraine mineral deal weighs on sentiment in this space.


• Some analysts continue citing reports earlier this year regarding potential flexibility in gas storage targets, whilst German utility firms also called for an easing of said targets ahead of next winter.


• "EU gas storage is a little over 40% full, down from 64% at the same stage last year, and below the 5-year average of 51%. However, this 5-year average is inflated by the milder winters seen in 2022/23 and 2023/24, along with Covid impacts in 2020." ING says.

Precious Metals: Gold +0.1%, Silver +0.2%, Palladium +1.2%

• Upward bias across precious metals in what is seemingly a recovery of recent losses and come despite the firmer Dollar this morning.


• Spot gold resumed its gradual rebound from yesterday's trough with the precious metal back above the USD 2,900/oz level in a current USD 2,905.5990-2,930.18/oz range and well within yesterday's USD 2,888.18-2,953.42/oz parameter.

Base Metals: 3M LME Copper +1.2%

• Copper futures continue to be underpinned following a power surge in Chile which affected all of state miner Codelco's mines and prompted a state of emergency declaration, while prices were further boosted overnight on reports that the Trump administration will investigate the possible imposition of tariffs to rebuild the US copper industry.


• Chile's state-owned copper miner Codelco said a power outage has affected all of its mines and Chile declared a state of emergency and curfew from 22:00 to 06:00 local time for regions affected by the blackout, while Chile's national electricity coordinator later announced a quarter of the electrical demand has been restored to the grid and a full recovery could happen by morning.


• 3M LME copper trades on either side of USD 9,500/t in a USD 9,454.90-9,558.00/t range.

26 Feb 2025 - 10:00- EnergyGeopolitical- Source: Newsquawk