EUROPEAN COMMODITIES UPDATE: Crude subdued continuing recent action & failing to benefit from China's support which has bolstered base metals

WTI/Brent: -1.3%/-0.8%

• Crude futures are yet again subdued after Tuesday’s choppy performance, where benchmarks failed to benefit from the latest private sector inventory data, which showed a surprise draw in headline crude. Additionally, OPEC+ action, tariff uncertainty, and US growth woes continued to weigh on sentiment; the latter yet again highlighted by the poor RCM/TIPP economic optimism print.


• Price action this morning has been choppy, and benchmarks are at session lows with Brent and WTI trading at USD 67.47/bbl and USD 70.55/bbl respectively. While pressured, the action this far keeps Brent almost a dollar clear of Tuesday’s USD 66.77/bbl low but still with pressure of over USD 2/bbl WTD.


• US and Ukraine relations continue to tread a fine line, though Reuters sources reported that the nations are planning to sign a minerals deal; however, we are yet to see anything come from this in terms of timings and/or adjustments to the deal from last week.


• As a reminder, on Tuesday we also saw comments from US Commerce Secretary Lutnick, who said he thinks Trump will meet Mexico and Canada in the middle on tariffs, a comment which weighed on benchmarks and in particular WTI.


• Finally, on the supply front, 200k/bpd is at risk in Venezuela, as Chevron (CVX) no longer has a licence to operate in the sanctioned country, ever since the US treasury authorised the CVX wind-down.

Gold: +0.1%

• Gold trades indecisively but towards its USD 2922/oz high, after remaining above the USD 2900/oz mark for most of yesterday’s session. Key levels include its 21 DMA at USD 2904/oz, a figure which was breached overnight to a USD 2902/oz low, though the move proved fleeting.


• The yellow metal very much remains a haven play, with ongoing geopolitics, tariff uncertainty and US growth concerns in focus. Although comments from US Commerce Secretary Lutnick, as mentioned above, sparked modest pressure in yesterday’s session, albeit the reaction was muted by the weak dollar.


• Overall, in terms of current price action the yellow metal is potentially deriving support from above points of concern/uncertainty, but has been unable to extend further and test Tuesday’s USD 2927/oz peak given the constructive risk tone.

Copper: +2.0%

• Bolstered by the softer dollar and robust risk tone. While the European tone is being driven primarily by German updates the narrative for metals is very much focussed on China.


• From China, the main points were the Official Growth Report which maintained a growth target of around 5% and pledged measures to boost spending.


• Specifically, this has lifted 3M LME Copper above the USD 9.5k mark compared to Tuesday’s USD 9.34k close.

05 Mar 2025 - 10:20- ForexGeopolitical- Source: Newsquawk