EUROPEAN COMMODITIES UPDATE: Crude remains indecisive, but the softer Dollar underpins metals ex-nickel

Analysis details (09:22)

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  WTI Apr and Brent May futures are choppy and indecisive at the start of Friday’s European session after the benchmarks settled firmer by almost USD 0.50/bbl apiece yesterday amid a lack of catalysts alongside a revival in risk appetite. Overnight, the contracts traded horizontally with macro drivers on the lighter side, aside from Chinese Caixin PMIs topping forecasts; but, volatility entered the market as European traders entered the fray. Ahead, price action could be dictated by sentiment as US Services PMIs from S&P Global and the ISM are due to be released, alongside a slew of Fed commentary following the recent string of hot economic data. Elsewhere, Russian President Putin is due to chair a meeting of the Security Council following yesterday’s reports of “Ukrainian saboteurs” infiltrating Russia’s Bryansk region. Yesterday, Russia’s Kremlin spokesperson, when asked whether the events in the Bryansk region will affect the "status of the special military operation", said he cannot say yet. WTI trades on either side of USD 78/bbl (77.70-78.16/bbl range) while Brent trades within USD 84.72-84.26/bbl parameters.


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  Nat gas futures diverged in the US and in Europe, with US Henry Hub futures extending gains above USD 2.80/MMBtu with yesterday’s EIA nat gas inventories also showing a deeper draw than expected. Dutch TTF continues to trundle further below the EUR 50/MWh mark to levels under EUR 46/MWh - with participants citing milder weather, comfortable inventories, and a plunge in demand.


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  Metals are mostly firmer amid the softer Dollar. Spot gold eyes USD 1,850/oz to the upside after topping its 21 DMA (USD 1,844.10/oz) from a USD 1,834.72/oz intraday low. Base metals are mostly firmer amid the cautiously optimistic risk tone. 3M LME copper briefly rose back above USD 9,000/t before receding under the level. Elsewhere, LME nickel resides as an underperformer after the UK FCA opened an enforcement probe into the LME’s conduct with regard to the nickel short-squeeze. Meanwhile, on iron ore, BHP has signed contracts with Shandong ports, which accounts for circa. 1/4 of China's annual iron ore throughput, according to Global Times sources. Add to that, China state planner NDRC said experts suggest strengthening regulation and supervision of the iron ore market to curb unreasonable price increases

03 Mar 2023 - 09:22- MetalsResearch Sheet- Source: Newsquawk