EUROPEAN COMMODITIES UPDATE: Crude trims recent losses but metals pressured by the USD

Crude Oil: WTI Apr +0.9%, Brent May +0.9%

• Crude futures continue the attempt to nurse some losses after declining yesterday in choppy trade amid mixed inventories and with some support seen after President Trump announced to reverse concessions, Biden gave to Venezuela's Maduro in their oil deal - as a reminder, yesterday's session saw WTI Apr and Brent May settle with losses of USD 0.31/bbl and USD 0.43/bbl respectively.


• US President Trump announced on Truth Social to reverse concessions former President Biden gave to Venezuela's Maduro on an oil deal and stated the “Concession Agreement” is being terminated as of the March 1st option to renew.


• US Secretary of State Rubio said he is providing foreign policy guidance to revoke all Biden-era oil and gas licenses that have funded Venezuela’s Maduro regime.


• On the supply side, according to the Iraq News Agency, the Iraq government agreed with Kurdistan to restart oil exports. Note, that Reuters reported a few days ago that Iraqi Kurdistan authorities have agreed with the federal oil ministry to restart Kurdish crude exports based on available volumes.


• Newsflow in the European morning has been light with attention on tariff rhetoric after US President Trump's commentary yesterday in which he noted they will be announcing tariffs on the EU very soon, and that he is not stopping the tariffs, adding they will go on, not all, but a lot of them. There was also some confusion about his response to Canada/Mexico tariffs, Trump said they are going into effect from April 2nd, but Lutnick clarified global tariffs go into effect on April 2nd, while Trump can pause Canada/Mexico tariffs related to fentanyl/border if he is satisfied with their efforts by the March 4th deadline.


• On the geopolitical front, recent reports noted "Negotiations for the passage of the second phase will take place next week in Cairo or Doha", according to Al Jazeera.


• Goldman Sachs noted that a 10% tariff on all oil imports would not significantly raise WTI and Brent crude prices, but would raise the annual cost of refined oil products by USD 170 per US household, adding that the dominance agenda also reinforces their oil price range forecast, with Brent above USD 70/bbl to support solid growth in marginal US supply, but below USD 85/bbl to keep gasoline prices below their public tipping point.


• WTI Apr remains firmly under USD 70/bbl and resides in a USD 68.61-69.34/bbl range with Brent May in a USD 72.10-72.80/bbl range at the time of writing.

Nat Gas: Dutch TTF +5.9%, US Nat Gas +4.9%

• European gas prices are rebounding following further pressure yesterday which saw prices hit lows from mid-December, with some desks suggesting the recent selloff took the contracts to oversold territory.


• Recent losses have been attributed to milder weather forecasts - "However, with storage at just 40% full, the region faces challenges in refilling storage, relying more on LNG imports. The recent price weakness has TTF trading below spot Asian LNG, which should see slower flows into Europe. The scale of the move lower also suggests the market is starting to price in prospects for a Russia-Ukraine peace deal, one that could include the resumption of some Russian pipeline gas to Europe. If this happens, it changes the outlook for the European market significantly" says ING.

Precious Metals: Gold -1.1%, Silver -0.4%, Palladium U/C

• Subdued sentiment was seen in precious metals and as spot gold trickled lower amid a firmer dollar and eventually dipped under yesterday's trough beneath the USD 2,900/oz level.


• Losses in the complex also come amid little fresh updates on the geopolitical front, although recent reports noted "Negotiations for the passage of the second phase will take place next week in Cairo or Doha", according to Al Jazeera.


• Spot gold resides in a current USD 2,877.17-2,920.81/oz range after dipping under support at 2,890.86/oz

Base Metals: 3M LME Copper -0.1%

• Base metals trade mixed amid the tentative mood across markets and with upside capped by tariff rhetoric. Overnight action saw copper futures subdued after wiping out this week's gains.


• The Chinese Commerce Ministry, on the US probe into copper, urged the US to halt its investigation as soon as possible; willing to resolve the issue through dialogue and consultation.


• 3M LME copper resides in a USD 9,410.00-9,461.00/t range thus far after dipping sub-9,500/t yesterday.


• Dalian iron ore ended daytime trade with losses of 1.1%; traders cite downbeat sentiment from escalating tariff measures.

27 Feb 2025 - 10:20- ForexGeopolitical- Source: Newsquawk