EUROPEAN COMMODITIES UPDATE: Crude holds firm with geopolitics and the Texas freeze in mind; gold awaits US jobs

Analysis details (10:49)

WTI and Brent front month futures continue grinding higher as the upside momentum seen since the prior session resumes following some brief consolidation during the APAC session. Upside in early European hours coincided with a China-Russia deal for an additional 10bcm of NatGas, alongside a joint statement vowing deep cooperation. The gas deal intimates that Russia is preparing contingency plans in the event of NATO sanctions - if Ukraine is invaded – possibly enveloping further risk premium into already-elevated prices. At the same time, Texas is once again experiencing a freeze – further spurring the demand side of the equation and suppressing the supply side. This is evident in the Brent-WTI arb contracting to some 0.7/bb vs USD 4/bbl on Jan 31st. Ahead, participants will likely get some influence from the US labour market report, although geopolitics remain at the forefront. Elsewhere, spot gold continues grinding higher with amid some potential geopolitical demand or some pre-NFP positioning, with the yellow metal’s 21 DMA seen around USD 1,815/oz. LME copper meanwhile remains on a firmer footing with prices re-eyeing USD 10k/t to the upside.

04 Feb 2022 - 10:48- EnergyGeopolitical- Source: Newsquawk