EUROPEAN COMMODITIES UPDATE: Crude pulls back, gold loses some of its shine and LME nickel trims earlier losses

Analysis details (10:27)

Crude prices have been pulling back since around the European cash open. The move commenced shortly after China's COVID epidemiologist Wannian said that China's COVID curbs should be targeted and effective, highlighting that they are seeing rising COVID pressure from surrounding nations, such as Hong Kong. A few minutes after the comments, downside was seen across the crude complex and losses were exacerbated after the Vitol CEO said the Co. is already observing some oil demand destruction. WTI and Brent May contracts have slipped from intraday highs of USD 113.30/bbl and USD 119.48/bbl to current lows of USD 107.10/bbl and USD 112.64/bbl, respectively. Further, markets are on the lookout for a joint EU stance regarding energy sanctions on Russia with France and "several eastern EU countries" reportedly backing the idea of energy price caps with Germany and the Netherlands left to be convinced, according to Journalist Keating. This morning, it was reported that Belgium is calling for a gas price cap at EUR 120/MWh, which could be pegged to American and Asian prices to remain competitive, according to Politico. Note, Germany and the Netherlands argue that refusing to pay market price could mean suppliers go elsewhere. Meanwhile, a senior German official stated that Berlin's opposition to energy sanctions is “unlikely to change” unless Russia uses “chemical or nuclear weapons”, according to Eurasia Group's Rahman. Elsewhere, spot gold was pressured as yields and stocks rose in what seemed to be outflows from haven currencies, but the yellow metal remains sub-USD 1,950/oz and under its 21 DMA at USD 1,944/oz. Elsewhere, 3M LME nickel slumped 12% at the open this morning after the exchange increased the limit back to its original 15%.

22 Mar 2022 - 10:26- EnergyResearch Sheet- Source: Newquawk