EUROPEAN COMMODITIES UPDATE: Rangebound, but choppy trade awaiting confirmation of Russian troop withdrawals

Analysis details (10:15)

WTI and Brent are firmer with price action continuing to be dictated by geopolitical updates around Russia/Ukraine. Currently, the benchmarks are firmer to the tune of around USD 0.80/bbl and experienced some modest gyrations following the European cash equity open on updates from Russian and then NATO. Beginning with Russia, Ifx reported that they are preparing to withdraw additional troops from Crimea at the end of drills – an update that pressured the benchmarks, sending Brent marginally back below USD 94.00/bbl, though still someway from the current trough of USD 92.76/bbl. However, this downside was short-lived amid commentary from NATO Secretary General Stoltenberg, who said they are yet to see a Russian de-escalation. Explicitly, remarking that the movement of Russian troops does not equate to confirmation of a withdrawal. Updates that lifted Brent back above that USD 94.00/bbl mark, though, still shy of the USD 94.60/bbl session best. For the session ahead, we continue to look for confirmation of a Russian troop withdrawal from a non-Russian outlet/source, and importantly confirmation of activity that goes beyond the movement of troops; given the above remarks from NATO’s Stoltenberg. Elsewhere, to recap, last night’s Private Inventory release showed a headline draw that was 0.5mln shy of expectations while the accompanying metrics were somewhat mixed given an unexpected gasoline draw of 0.9mln (exp. +0.6mln). The EIA release due later in the session is expected to print a headline draw of 1.57M. Moving to metals, spot continues to hold above the USD 1850/oz mark, is yet to test the level and by extension the touted support area between USD 1842.70-1843.80. In-fitting with Tuesday’s action, iron ore was pressured in APAC trade amid concerns of an additional crackdown by the Chinese gov’t. Elsewhere, LME copper is contained given the generally tentative risk tone, awaiting direction in the form of geopolitical updates and/or Fed speak/data due later.

16 Feb 2022 - 10:15- MetalsGeopolitical- Source: Newsquawk