EUROPEAN COMMODITIES UPDATE: Oil remains pressured & XAU continues to ease, base metals dented further by the absence of China

WTI/Brent: -3.2%/-3.1%

• Oil prices remain subdued and continue to trade deep into the red after Thursday’s unexpected supply increase from OPEC+, along with a continuation of the ‘Liberation day’ trade.


• Regarding OPEC+, the eight members which previously were conducting voluntary cuts are now set to accelerate the planned return of their barrels. This will bring back the equivalent of three months' (under the original roadmap) worth in the month of May.


• Specifically, the group will now increase supply by 411k/bpd, compared to its original plan of 135k/bpd.


• The reason for its actions are unclear, some desks are citing a movement to pressure nations which produce above targets, and others are pinning it on Trump pressure, including “Drill baby Drill” and sanctions on Venezuela and Iran.


• ING highlights that more OPEC+ supply should translate to more medium sour crude oil and a wider Brent-Dubai spread, which has seen an unusual discount for much of the year.

Gold: -1.0%

• Spot gold continues to move lower on the day despite the poor risk sentiment, and now trades towards session lows printed in Asia of USD 3087/oz.


• One potential reason for the downside since ‘Liberation Day’ is that before tariffs were officially announced, demand for gold had been increasing amid concerns that gold imports to the US were to become subject to tariffs. Though, the White House noted that gold has been excluded from the latest round of tariffs, which could be dictating recent price action.


• ING says “the sell-off should be short-lived, with escalating trade actions likely to continue to bolster safe-haven buying”

3M LME Copper: -2.2%

• Copper is lower with 3M LME Copper under USD 9200/t at the time of writing, after trundling lower since the open; it remains modestly elevated from its session lows, but has fallen to levels not seen since February 5th 2025, after prices surged in anticipation of Copper tariffs.


• Now, the narrative has shifted more to growth concerns, which of course, come from the latest tariff announcement which has seen a number of banks adjusting calls for a recession.


• Specifically for its biggest buyer, Goldman Sachs expects the tariffs would further drag China's GDP growth by around 1 percentage point.

04 Apr 2025 - 09:55- ForexEU Research- Source: Newsquawk