EUROPEAN COMMODITIES UPDATE: Crude weighed on by SPR updates whilst metals benefit from a Dollar decline

Analysis details (09:49)

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  WTI March and Brent April futures remain heavy in the aftermath of reports that the Biden administration plans to sell 26mln more crude oil barrels from the Strategic Petroleum Reserve (SPR), with deliveries estimated to happen between April and June after Congress' approval, according to Bloomberg. "The non-emergency sale will amount to 26mln barrels of crude, according to people familiar with the matter, and is part of the congressionally mandated sale lawmakers approved years ago for the current fiscal year.", the report said. The timing of the sale (agreed under 2015 legislation) coincidently follows Russia’s announcement last week that it will decrease production by 500k BPD as a response to the Western oil caps. Elsewhere, the UAE Energy Minister hit the wires and suggested the UAE is committed to the OPEC deal lasting until end-2023, but he is more worried about supply as opposed to demand next year. Meanwhile, reports suggested Russian Urals crude supplies to China increased to a 7-month high of 230k BPD in January, according to Reuters sources. WTI remains under USD 80/bbl (USD 78.99-79.61/bbl range) while Brent sits around USD 86/bbl (USD 85.67-86.42/bbl range) as participants sit tight for the US CPI metrics at 13:30GMT/08:30EST (Full Newsquawk preview available), whilst the OPEC Monthly Oil Market report will likely be dated with embargoed copies released to subscribers a couple of hours before publication.


• Looking at gas markets, US Henry Hub and Dutch TTF futures are modestly firmer intraday but still rangebound in the bigger picture. Yesterday, Freeport LNG submitted its request to Federal Energy Regulatory Commission (FERC) for the authorisation to progress to full, commercial operations of Phase 1 of the Texas plant. “The request includes bringing back online all three liquefaction trains (a total of 15mtpa), two storage tanks and one loading dock. This follows reports that over the weekend the plant loaded its first cargo since a fire in June last year, after receiving limited approvals from FERC to do so.”, according to ING.


• Over to metals, spot gold mirrors price action in the Dollar and trades modestly firmer intraday as DXY dips under 103.00 – with the yellow metal on either side of its 50 DMA USD 1,857.68/oz in a USD 1,853-1,865/oz range vs yesterday’s 1,850.50-1,866.64/oz range. Base metals post cautious gains across the board as a function of the Dollar – with 3M LME copper aiming USD 9,000/t to the upside vs a USD 8,938.00/t current intraday trough. Elsewhere, LME exchange inventories posted another large build of some 25k following the near-90k build yesterday and strong flows into LME warehouses last week – “The increase in stocks will ease fears over supply shortages, at least in the near term”, say the analysts at ING.

14 Feb 2023 - 09:50- Research Sheet- Source: Newsquawk