EUROPEAN COMMODITIES UPDATE: Mixed trade across commodities as markets await the next catalyst

Analysis details (10:35)

• 
  WTI and Brent front-month futures are somewhat choppy but in contained ranges, with prices subdued as the risk mood across markets deteriorates in the early European hours. WTI Apr and Brent May settled lower by USD 0.90/bbl and USD 0.63/bbl respectively despite the EIA’s weekly inventories printing the first draw of the year. Prices were little swayed at the time with desks suggesting the complex is more focused on the Fed following Chair Powell’s recent hawkish commentary. This morning, prices may be somewhat cushioned by geopolitics – Russia unleashed a barrage of missiles on Ukrainian cities overnight, with reports from the Ukrainian side suggesting Moscow used six hypersonic missiles; participants are awaiting confirmation from the West. On the OPEC+ front, the Russian Foreign Minister, in a meeting with his Saudi counterpart, confirmed the consistent implementation of commitments under the OPEC+ deal – which follows Russia’s announcement last month of a 500k BPD unilateral production cut. Saudi's Foreign Minister said the Kingdom is coordinating with Russia regarding energy prices and achieving balance in global markets. WTI resides around the USD 76.50/bbl mark (USD 76.16-76.85 range) while Brent trades around USD 82.50/bbl (USD 82.17-82.89/bbl range).


• In gas markets, a divergence is again seen between Dutch TTF and US Henry Hub futures, with the latter softer just above EUR 40/MWh as the Energy Commissioner said they will propose to extend the EU gas price cap to other gas hubs, and will also propose the EU extends the voluntary target to cut gas demand by 15%. Elsewhere, strike action in France has affected its energy infrastructure, including the stoppage of operations at four LNG terminals. Stateside, US Henry Hub futures trade around USD 2.6/ MMBtu, whilst US Freeport LNG received approval to restart its third and final production train.


• Spot gold remains just above USD 1,800/oz and within yesterday’s 1,809.43-1,824.30/oz range amid a lack of major drivers throughout the European morning. In terms of technicals, the yellow metal is sandwiched between its 10 DMA (1,827.34/oz) and 100 DMA (1,808.05/oz). Base metals are mostly softer amid the downbeat mood, with 3M LME copper extending on losses under USD 9,000/t.

09 Mar 2023 - 10:35- Research Sheet- Source: Newsquawk