EUROPEAN COMMODITIES UPDATE: Crude is underpinned by China while metals are subdued by the Buck

Analysis details (10:09)

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  WTI Apr and Brent May futures are firmer intraday after settling higher by USD 0.64/bbl and USD 0.86/bbl respectively on Wednesday following a choppy session. The APAC hours largely saw a consolidation of price action which then waned heading into the European open as sentiment remained indecisive. The European morning has seen prices rebound off worst levels and towards intraday highs in a move which coincided with reports that China's 2023 GDP growth target could range between 5.0%-5.5% and be as high as 6.0%, according to Reuters sources, higher than the 4.5%-5.5% band proposed in November. Recent data backs the notion of a higher GDP target, with the latest Official Chinese NBS PMIs notably topping expectations in February. ING's Greater China chief economist said in a note that this upbeat data gave the government strong reasons to set a high growth target of 5.5% to 6%. Stateside, yesterday’s EIA build adds to the latest string of builds seen across the EIAs and APIs – “A heavier-than-usual refinery maintenance season in the country keeps domestic crude oil demand under pressure with refinery inputs staying below the five-year average so far in the year”, posits the desk at ING. Elsewhere, the geopolitical headline risk remains with reports this morning suggesting noting of a Ukrainian DRG group entering Bryansk oblast, Russia, with some suggesting that Ukrainian soldiers have captured inhabitants in the village of Sushany – Russia's FSB said it is taking measures against Ukrainian sabotage groups in Russia's Bryansk region. At the time of writing, WTI has topped USD 78.00/bbl (vs USD 77.23/bbl low), while Brent eyes USD 85/bbl to the upside (vs USD 83.83/bbl low).


• Over to gas markets, Dutch TTF and Henry Hub futures see a modest divergence – with the former extending on losses under EUR 50/MWh, with the contract falling under EUR 47.75/MWh in recent trade. The latter meanwhile pulls back following its recent rally to levels near USD 2.85/MMBtu after dipping under USD 2.00/MMBtu a week ago.


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  Spot gold is modestly softer around the USD 1,830/oz mark after finding some support at its 10 DMA (1,828.79/oz). This follows three back-to-back sessions of gains which took the yellow metal from a recent low of USD 1,804.68/oz to a peak of USD 1,844.83/oz. Ahead, participants will be eyeing commentary from Fed's Waller & Kashkari, ECB's Schnabel following the recent string of “hot” data from the US and EZ. Industrial metals are mixed amid opposing forces from a downbeat mood and the aforementioned China GDP optimism. 3M LME copper trades at session lows around USD 25 above the USD 9,000/t mark.

02 Mar 2023 - 10:12- Research Sheet- Source: Newsquawk