EUROPEAN COMMODITIES UPDATE: Crude choppy in a tight range while metals benefit from a softer Dollar ahead of trade updates

Crude Oil: WTI May U/C/Brent June +0.1%

• Choppy trade in the crude complex despite the softer Dollar and cautiously positive tone across the market, with prices failing to hold a mild relief rally this morning amidst several fundamental factors.


• On the tariff front, China was threatened with an additional 50% tariff on top of the 54% cumulative US tariffs if it does not lift its 34% retaliatory tariff by today - Chinese officials have not expressed willingness to back down. Further escalation will exacerbate the bearish growth sentiment and in turn impact crude prices amid dampening oil demand.


• OPEC+ sped up its return of barrels from its voluntary cuts, which some believe to be a "punishment" from Saudi to OPEC cheaters, whilst others believe it could be a move to sweeten sentiment with the US.


• Analysts at ING suggest "The broader move lower we’ve seen in crude oil since 2 April suggests the market is pricing in bigger odds of a recession. The scale of the sell-off will worry OPEC+, which last week surprised the market with a larger-than-expected supply hike for May. If downward pressure continues, the OPEC+ move could be very short-lived. We could see OPEC+ pause or even reverse supply increases. The Saudis need around USD 90/bbl to balance their budget. While their supply increase last week suggests they’re not aiming for this level, the Saudis probably don’t want to see an even wider gap between their fiscal breakeven level and current prices."


• WTI resides in a USD 60.17-61.75/bbl range while Brent sits in a USD 63.66-65.21/bbl parameter.

Nat Gas: Dutch TTF -3.1%, US Nat Gas -0.2%

• Softer in tandem with broader price action across the energy complex, with European nat gas trading at levels seen in September.


• Desks suggest investment funds have reduced net long in Dutch TTF by a notable amount over the last couple of months, but have room for further liquidation.


• EU meanwhile looks to replenish storage ahead of the next winter.


• Elsewhere, it was reported that US President Trump's order tonight reportedly seeks to tap coal power in a bid to dominate AI, according to Bloomberg. Order signing event slated for 20:00 BST.

Precious Metals: Gold +0.8%, Silver +0.5%, Palladium +0.2%

• Firmer trade across precious metals amid the softer Dollar and against the backdrop of trade woes.


• Little new to add for the complex as participants juggle bullish and bearish reports surrounding trade, with markets worried about the US-China tit-for-tat escalation, whilst the EU retaliated to the 25% steel and aluminium tariffs with some concessions.


• The European calendar has little of note on the macro front; the Stateside releases see a White House Press Briefing at 18:00 BST, Fed's 2027-voter Daly at 19:00 BST, and a Trump executive order signing event at 20:00 BST.


• Spot gold resides in a USD 2,978.72-3,016.10/oz range at the time of writing.

Base Metals: 3M LME Copper +0.2%

• Mostly firmer amid the softer Dollar and cautiously optimistic sentiment this morning.


• Sentiment possibly also supported by expectations that China will attempt to cushion the US tariff blow via stimulative measures, although, China is seemingly unwilling to back down from tit-for-tat tariffs, with participants fearing further escalation between the world's two largest economies.


• 3M LME copper resides in a USD 8,734.10-8,846.00/t range at the time of writing.


• Dalian iron ore slid to a 5-month low amid escalating US-Sino tensions overnight, whilst traders suggest eyeing seasonal demand during the peak construction period in April.

08 Apr 2025 - 10:20- ForexGeopolitical- Source: Newsquawk