EUROPEAN COMMODITIES UPDATE: Oil and base metals firmer, gold trades sideways ahead of US CPI

Crude Oil: WTI Apr +0.7%/Brent May +0.7%

• Firmer but choppy trade across the contracts with gains capped following yesterday's choppy performance and flimsy risk appetite, while the latest private sector inventory data was mixed which showed a larger-than-expected build for headline crude and a wider-than-forecast drawdown in gasoline stockpiles.


• US Private Inventory Data (bbls): Crude +4.2mln (exp. +2.0mln), Distillate +0.4mln (exp. -0.8mln), Gasoline -4.6mln (exp. -1.9mln), Cushing -1.2mln.


• Elsewhere, EIA STEO stated EIA sees 2025 world oil demand of 104.1mln BPD (prev. 104.1mln BPD) and sees 2026 demand of 105.3mln BPD (prev. 105.2mln). Traders look ahead to the OPEC MOMR today and the IEA OMR tomorrow, although these will likely be overlooked.


• In geopolitics, the US said Ukraine expressed readiness to accept the US proposal to enact an immediate and interim 30-day ceasefire. Markets now await a response from Russian President Putin. That being said, a Russian lawmaker stated that any potential ceasefire agreement in Ukraine will be under Moscow's terms and not those set by Washington. Later reports suggested Putin and Trump may have a call on the Ukraine talks in the coming days. Analysts at ING suggest "The oil market seems to be largely ignoring Ukraine agreeing to a US-brokered ceasefire. There is still uncertainty over where Russia stands on the proposed agreement."


• WTI Apr currently trades in a USD 66.15-66.84 band while Brent May sits in a USD 69.48-70.13/bbl range.

Precious Metals: Gold U/C, Silver +0.3%, Palladium +0.5%

• Spot gold remains in the sideways trade seen overnight and holds on to the prior day's spoils with the dollar steady as US CPI looms.


• Analysts expect US CPI to rise +0.3% M/M in February (prev. +0.5%), while the annual rate is seen easing to 2.9% Y/Y from 3.0%. The core rate of CPI is seen rising +0.3% M/M (prev. +0.4%), with the annual rate cooling to 3.2% Y/Y from 3.3%. Wednesday's CPI data comes ahead of Thursday's PPI release, where headline producer prices are seen rising +0.3% M/M in February (prev. +0.4%), while the core rate of PPI is seen rising +0.3% M/M, matching the January figure; both the CPI and PPI measures will help traders to model what the February PCE data (the Fed's preferred measure) will look like when it is released on March 28th.


• Spot gold currently resides in a USD 2,909.09-2,925.39/oz range after topping yesterday's USD 2,922.23/oz range with the next upside level the 7th March high (USD 2,930.54/oz range).

Base Metals: 3M LME Copper -0.4%

• Copper futures remain underpinned after the prior day's resurgence and were unfazed by the recent tariff-related to and from.


• To recap, US President Trump's 25% tariffs on steel and aluminium took effect overnight with no exemptions. Trump separately commented that tariffs are having and will have a tremendously positive impact, while he also suggested tariffs may go higher than 25% but did not specify which tariffs. In response to the steel and aluminium levies, the European Commission launched countermeasures on US imports. Analysts at ING suggest "Aluminium is likely to be most impacted with the US importing significant volumes of its aluminium from abroad."


• 3M LME copper currently trades in a USD 9,646.40-9,748.95/t parameter.

12 Mar 2025 - 10:20- ForexData- Source: Newsquawk