EUROPEAN COMMODITIES UPDATE: Crude underpinned on supply woes, but metals are capped by the firmer Dollar

Analysis details (09:38)

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  WTI and Brent front-month futures remain firmer intraday after the May contracts marginally higher by USD 0.39/bbl and USD 0.53/bbl respectively. Desks suggest oil prices remain supported by supply concerns, with Iraqi oil flows via Turkey halted following the legal ruling in favour of the Iraqi government, with no agreement reached yet, whilst the US is also calling for the resumption of oil flows. Furthermore, the weekly US Private Inventories yesterday printed a large surprise draw - Crude -6.1mln (exp. +0.1mln) – while the internals were largely bullish for the complex, particularly the much larger-than-expected draw in gasoline. Traders now await the official numbers from the EIA later today. WTI resides just under USD 74/bbl (in a 73.51-74.00/bbl range) while its Brent counterpart trades on either side of USD 79/bbl (in a 78.73-79.30/bbl parameter).


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  Gas markets are firmer intraday on both sides of the pond (Dutch TTF +2.7%, US Henry Hub +1.2%). On Tuesday, EU energy ministers extended the voluntary 15% nat gas demand cut by a further 12 months to March 2024. “Our balance sheet shows that the EU will not need to see cuts as large as 15% from April onwards. Instead, we believe a 10% demand cut will be enough”, say the analysts at ING. Reports also suggest that the European Commission considering ways to tackle increased Russian LNG flows into Europe, with Russian LNG flows to Europe up more than 37% Y/Y – the is EU exploring options to block Russian firms from booking capacity at import terminals – “This would basically give member countries the option to block Russian LNG imports, without the region having to impose sanctions”, ING clarifies.


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  Metals are largely capped by the firmer bias seen in the Dollar. Spot gold remains within yesterday’s 1,949.23-75.34/oz range, with some participants noting dampened demand as banking fears abate. Industrial metals hold a mostly downward tilt with 3M LME copper in a relatively narrow range of just under USD 9,000/t. Overnight, Dalian iron ore prices recovered on expectations of stronger steel consumption from China ahead of the spring construction season in the country, albeit Singapore iron ore prices were relatively flat in comparison following three back-to-back sessions of gains.

29 Mar 2023 - 09:40- Research Sheet- Source: Newsquawk