EUROPEAN COMMODITIES UPDATE: Crude slips on LNG deals whilst gold consolidates and LME Nickel sees volatile trade

Analysis details (10:09)

WTI and Brent May contracts lost ground in early European trade with several factors in play for the oil complex, although the front-months are trimming losses at the time of writing. The initial downside in prices coincided with constructive commentary from the Ukrainian side on the state of diplomatic talks with Moscow, with President Zelensky's aid stating that "There is progress in ceasefire negotiations with Russia" and expressed "cautious optimism", signalling a possibility of a diplomatic breakthrough in the negotiations with Russia, according to Sky News Arabia. Meanwhile, Sputnik suggested the Indian Government is expected to formally announce an INR-RUB payment arrangement next week which would allow the bypassing of US sanctions, according to Sputnik, which will allow Russia to circumvent some sanctions imposed by the West. As a reminder, Russian President Putin earlier this week also suggested hostile countries should pay Rubles for gas. Italian PM Draghi said paying in RUB would be a way for Russia to avoid sanctions, "Two other senior Western EU officials told [Politico] Playbook the EU could not possibly accept Putin's demands and the bloc may ultimately have to stop buying Russian gas altogether... At the same time, German officials have warned that the EU could suffer more than Russia if energy imports were stopped now". On that note, the European morning also saw the release of the EU's plan to wane off Russian energy - whereby it is to work towards attaining around 50BCM of additional LNG from the US for EU members until at least 2030, according to a document. WTI trades on either side of 110/bbl (vs an intraday range of 109.97-112.79) whilst its Brent counterpart is making its way back to 118/bbl after finding a current base around USD 115.75/bbl. Elsewhere, spot gold manages to hold USD 1,950/oz+ status with its 21 DMA also seen at the psychological mark as the yellow metal waits for the next catalyst. Elsewhere, LME nickel initially soared at the open and briefly breached USD 40k/t to the upside in the 3M contract before reversing gains in what remains a volatile market

25 Mar 2022 - 10:09- MetalsEconomic Commentary- Source: Newsquawk