EUROPEAN COMMODITIES UPDATE: Crude trims overnight losses while metals remain underpinned by the weaker Buck

Analysis details (09:37)

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  WTI and Brent May futures are softer intraday but off worst levels following yesterday’s whipsawing, which saw the contracts settle higher by over USD 1/bbl apiece before Fed Chair Powell’s presser and US Treasury Secretary Yellen’s commentary, which in unison hit sentiment and dragged oil prices down in sympathy. News flow for the complex has been light this morning as participants in Europe hardly have time to ponder on the FOMC amid a wave of G10 central bank decisions, which saw the SNB and Norges hike rates as expected, while the BoE gears up for a 25bps hike at 12:00GMT/08:00EDT following yesterday’s hot UK inflation data. WTI is back on a USD 70/bbl (in a USD 69.91-70.73/bbl range while its Brent counterpart trades north of USD 76/bbl (in a USD 75.76-76.61/bbl range).


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  Natural gas prices are firmer on both sides of the pond, with Dutch TTF back on a EUR 40/MWh+ handle, while US Henry Hub futures hold just under USD 2.25/MMBtu. On the European gas situation, the Federal Network Agency head warned that the danger of gas storage persists, with the energy watchdog warning that Germany could face a shortage next winter if demand is not further reduced. The comments from the watchdog, cited by the FT, echo recent remarks from the IEA head Birol, who warned against overconfidence for next winter and the need to focus on conservation and renewables.


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  Spot gold and industrial metals are lifted by the softer Dollar but trade off best levels as the DXY trimmed losses. The yellow metal is back at levels north of USD 1,975/oz, reaching a current intraday high of USD 1,983.69/oz – a whisker away from yesterday’s USD 1,985.08/oz high – before pulling back slightly. Gold price action will likely be dictated by banking updates, and broader sentiment as the BoE looks to raise rates today, whilst several ECB officials are also on the docket. Elsewhere, industrial metals see cautious gains – 3M LME copper reached levels just shy of USD 9,000/t before reversing back under USD 8,900/t.

23 Mar 2023 - 09:38- Fixed IncomeEconomic Commentary- Source: Newsquawk