EUROPEAN COMMODITIES UPDATE: Crude off best levels but base metals gain across the board

Analysis details (11:08)

WTI and Brent futures are off best levels but still very much on a firm footing in a continuation of the geopolitically-induced gains which saw the most liquid futures settle higher by USD 7-8/bbl yesterday, whilst the arb between the benchmarks also garner attention as Russian crude falls out of favour. Energy Intelligence estimates that Russian oil exports dropped by at least one-third (2.5mln BPD) — this week as a result of financial and shipping sanctions. WTI Apr hit a peak of 116.50/bbl (vs low 110.60/bbl) whilst Brent May printed highs of 119.84/bbl (vs low 114.85/bbl). European Nat gas futures have also been on the grind higher – with earlier reports also suggesting the Yamal-Europe pipeline westbound gas flows to Germany from Poland have stopped. In terms of upcoming risk events for the crude market, with OPEC + out of the way, participants will likely continue to experience geopolitical headline risks ahead of ECB minutes and Fed Chair Powell’s second appearance. On the geopolitical front, Russia and Ukrainian officials are reportedly set to meet today at 12:00GMT/07:00EST, although Russian President Putin's Aide Medinsky stated Russia is still waiting for the Ukrainian delegation to arrive. The risk remains that the meeting will not go ahead; nonetheless, discussions themselves are not expected to lead to a breakthrough. Over to metals, the overnight session saw a surge in nickel and zinc prices. For context, Russia holds a large market share of total exports in nickel (~49%), palladium (~42%), aluminium (~26%), and platinum (~13%), whilst it also exports steel (~7%) and copper (~4%). Precious metals have resided within recent rages but with an upside bias as geopolitics and inflation remain the main themes.

03 Mar 2022 - 11:07- EnergyResearch Sheet- Source: Newsquawk