EUROPEAN COMMODITIES UPDATE: Oil and metals bid on Russian risk

Analysis details (11:05)

WTI and Brent front month futures have been extending on gains since the futures reopen overnight amid the ongoing geopolitics dictating the crude complex ahead of tomorrow’s OPEC+ meeting – with Brent May hitting a current high at around USD 102.30/bbl (vs low 98.30/bbl). Delving deeper into the fundamentals: in terms of the Russia-Ukraine situation, the meeting between lower-level officials yesterday failed to lead to an accord according to the Ukrainian side, whilst Russia's Kremlin said it is too early to assess the results of talks at the moment. Further, there have been reports that Belarus has crossed the border to Ukraine. Participants should also remain cognizant of commentary regarding Ukraine's ascension to Western bodies such as the EU or NATO – which would mark a major escalation and grant the West military jurisdiction into Ukraine. Over to Iran, nuclear deal headlines have been less constructive than last week amid some remaining sticking points. Ahead, the OPEC JTC meeting will commence today at 12:00GMT – although no policy decision will be made today. Tomorrow sees the decision-making OPEC+ meeting where ministers will likely maintain the current output hike plans given the sweet-spot OPEC members reside in - with regards to the oil price, not being involved in a war and as Russia crude looks less attractive. Elsewhere, reports suggested the Yamal-Europe pipeline has resumed eastbound gas flows from Germany to Poland, via Reuters citing Gascade data; thus Dutch May gas prints higher by 12% intraday at the time of writing. Meanwhile, it is also worth being aware that the shipping giant Maersk is to halt all freight in Russia. Meanwhile, precious metals are bid amid haven demand, with spot gold rising back towards the USD 1,930/oz area from a USD 1,900/oz base. Base metals are also on a firmer footing with LME copper back above USD 10,000/t whilst LME nickel rises over 5% on Russia supply risks. On that note, reports suggested that Chinese traders are reportedly winding back imports of Russian coal amid financing difficulties as state banks worry about sanctions.

01 Mar 2022 - 11:04- MetalsResearch Sheet- Source: Newsquawk