EUROPEAN COMMODITIES UPDATE: Crude slips on inventories and positive geological vibes

Crude Oil: WTI Mar +1.1%, Brent Apr +1.0%

• 
  Soft trade across the crude complex this morning as traders digest bearish Private Inventory data, constructive commentary on EU-US trade, Israel-Hamas hostage talks, and the prospects of a potential Russia-Ukraine ceasefire after Ukrainian President Zelenskiy yesterday said Ukraine is prepared to offer territory swap with Russia.


• 
  Private Inventories: Crude +9.0mln (exp. +3.0mln), Distillates -0.6mln (exp. -1.5mln), Gasoline -2.5mln (exp. +1.4mln), Cushing +0.4mln. - traders are on the lookout for confirmation via the DoEs later today.


• 
  EIA STEO (Feb) noted that 2025 world oil demand is seen at 104.1mln BPD (prev. saw 104.1mln BPD), while 2026 demand is seen at 105.2mln BPD (prev. 105.1mln BPD) - the OPEC MOMR is due today (time TBC) and the IEA OMR will be released tomorrow.


• 
  In trade, FT ran constructive EU-US commentary this morning which suggested the first conversation between European Commission President von der Leyen and US VP JD Vance yesterday was said to be "very constructive" and focused on areas where interests aligned, according to sources cited by the FT.


• 
  In geopolitics this morning, Journalist Kais says "Qatar and Egypt are in contact with the US on the [Israel-Hamas ceasefire] issue, and there is some optimism about reaching a solution", citing mediating sources.


• 
  Scheduled focus today will likely fall on the US CPI and Fed Chair Powell, but markets are attentive to Trump's potential reciprocal tariffs today.

Nat Gas: Dutch TTF -2.2%, US Nat Gas -0.9%

• 
  Giving back some recent gains in tandem with the broader energy markets, with Dutch TTF Mar'25 back under USD 57/MWh at the time of writing.


• 
  GS raised 2025 TTF forecast and said "Year-to-date European gas balances have realized significantly tighter than we expected. As a result, to properly rebuild storage this summer, it is no longer sufficient for European gas prices to just remain above coal generation costs, as we had previously expected. We now expect TTF to price at higher levels still to attract sufficient incremental LNG supply to balance the market. Accordingly, we raise our Sum25 TTF prices to 50 EUR/MWh from 40 EUR previously."


• 
  Elsewhere, it was reported that the EU is considering a temporary gas price cap to counter diverging costs with the US, although the proposal has spurred backlash from the industry which warned it could damage trust, according to FT.


• 
  WTI Mar resides towards the bottom of a USD 72.46-73.22/bbl range and Brent Apr similarly at the foot of a USD 76.22-76.91/bbl parameter.

Precious Metals: Gold -0.1%, Silver -0.2%, Palladium -0.5%

• 
  Subdued trade seen in precious metals as markets are on standby for the US inflation print.


• 
  Haven demand is not evident as constructive vibes are seen in EU-US relations and efforts are made to continue the Israel-Hamas ceasefire, whilst reports yesterday flagged some concessions Ukraine is willing to make in a bid to end the conflict.


• 
  Spot gold currently trades in a USD USD 2,883.69-2,900.79/oz range but within Monday's USD 2,860.40-2,911.96/oz parameter.

Base Metals: 3M LME Copper +0.4%

• 
  Mixed trade in base metals with markets cautious ahead of US CPI and potential Trump reciprocal tariffs.


• 
  3M LME copper resides in a USD 9,347.85-9,416.00/t range this morning.


• Elsewhere, iron ore prices rose to the highest level since October 2024, as Cyclone Zelia threatens supply chains in Australia. The storm is set to hit the Pilbara region, prompting Port Hedland authorities to suspend all operations. Recent heavy rainfall has already impacted first-quarter production levels, according to ING.


• Meanwhile, the Philippine Nickel Industry Association projected a 10-15% rise in nickel ore output for 2025, reversing last year’s decline. However, lawmakers have proposed a bill to limit raw mineral exports, potentially tightening supply. Meanwhile, demand from Indonesia and China remains strong due to domestic smelter shortages and steady industrial consumption.

12 Feb 2025 - 09:45- MetalsEU Research- Source: Newsquawk