EUROPEAN COMMODITIES UPDATE: Metals soar amid Trump's China commentary and a weaker dollar

Crude Oil: WTI Mar +0.4%/Brent Mar +0.4%

• Modest upward bias on Friday with prices still taking a breather following the declines yesterday owing to comments from US President Trump who told the WEF in Davos that he will be asking Saudi Arabia and OPEC to bring down the cost of oil.


• Desks suggest it will be no easy task to convince OPEC to increase output, and lower oil prices would also prove to be an obstacle to increasing US oil production.


• The delayed EIA report offered no major move in prices: US EIA Weekly Crude Stocks w/e -1.0M vs. Exp. -2.1M (Prev. -1.962M).


• Aside from that, crude-specific newsflow for the complex has been light thus far with little notable action seen following the EZ flash PMIs.


• WTI Mar resides in a USD 74.01-74.91/bbl range while Brent Mar sits in a USD 77.60-78.61/bbl range.

Nat Gas: Dutch TTF +1.1%, US Nat Gas -2.1%

• Mixed trade across the nat gas complex but with newsflow more on the quieter side.


• US Nat Gas continues to be weighed on by yesterday's EIA nat gas figures which showed a shallower-than-expected draw in stockpiles (-223.0bcf vs. Exp. -244.0bcf).


• European prices meanwhile are more supported and propped up by concerns surrounding EU gas storage, said to be around 60% full vs around 75% at the same stage last year.


• "The market and member countries are becoming increasingly concerned about the task of refilling storage through the injection season and the fact that the forward curve provides no incentive to store gas for next winter. The forward curve is in backwardation between summer 2025 and winter 2025/26. Talk of subsiding the refill of storage is growing", according to ING.

Precious Metals: Gold +0.8%, Silver +1.5%, Palladium +0.9%

• Precious metals are bolstered by the weaker dollar as the Trump tariffs trade partially unwound following conciliatory commentary from US President Trump on China, whilst Trump also said that he will demand that US interest rates drop immediately.


• On China, US President Trump said the conversation with Chinese President Xi went fine and responded he can when asked if he can make a deal with China, while he added would rather not have to use tariffs over China in a pre-taped interview with Fox News.


• Little action was seen to the overall positive EZ Flash PMIs this morning with the US docket also only consisting of S&P Global Flash PMIs, alongside University of Michigan Finals.


• Spot gold resides in a current USD 2,753.64-2,778.45/oz range as it approaches the highs set on 31st October 2024 (USD 2,790.17/oz) and 30th October 2024 (USD 2,790.07/oz).

Base Metals: 3M LME Copper +1.0%

• Firmer trade across base metals on the back of the weaker dollar coupled with US President Trump's constructive remarks on China.


• Aside from that, macro newsflow has been light with little action seen on the flash EZ PMIs.


• 3M LME copper currently resides in a USD 9,216.50-9,362.00/t range.


• Dalian iron ore futures ended daytime trade +0.7%, with traders citing the aforementioned Trump comments on China.


• Note, Chinese markets will be closed from January 28th to February 4th for the Chinese New Year celebrations.

24 Jan 2025 - 10:00- MetalsEU Research- Source: Newsquawk