EUROPEAN COMMODITIES UPDATE: Subdued trade across crude and most precious metals, but US gas rises on winter weather

WTI/Brent: -0.4%/-0.4%

• A softer start to the week with prices failing to garner much support from the declining Dollar and overall positive risk tone in Europe, although APAC sentiment was mostly subdued.
• Geopolitical updates include reports that Israel wants to keep some sites outside the northern border in Lebanon indefinitely, whilst Israel-Hamas ceasefire talks.
• Saudi Arabia raised crude prices for Asia for the first time in three months: February Arab light crude OSP to Asia at Oman/Dubai + USD 1.50/bbl (prev. USD 0.90/bbl), according to Reuters. Saudi Aramco February Crude OSP: Arab light to US at + USD 3.50/bbl vs ASCI (prev. 3.80); Arab light to NW Europe at + USD 0.05/bbl to ICE Brent (prev. 0.15), via Aramco.
• In terms of crude performance this year so far, analysts at ING suggest "The strength in the market appears to be on the back of a stronger physical market in the Middle East. This is well reflected in the Brent/Dubai spread which has traded into negative territory recently."
• WTI Feb resides in a USD 73.56-74.39/bbl range while Brent Mar sits in a 76.11-76.89/bbl parameter.

Nat Gas:

• Modestly softer intraday in fitting with the broader price action in energy.
• Some upticks were seen amid reports that European gas storage is depleting at the fastest rate since 2018, according to Bloomberg citing sources. Storage at 70% full on January 4th vs the 5-year seasonal average of 76%.
• ING said "Storage levels should still mean that Europe gets through this winter comfortably, however, the refilling of storage through the injection season will be a bigger job than last year, which should provide some support to summer prices. This is well reflected in the TTF forward curve with summer 2025 prices trading at a premium to 2025/26 winter prices."
• Meanwhile, a major winter storm is reported to have hit the US, producing heavy snow and significant ice which is expected to last days, with some 30 states issuing weather alerts; US Nat Gas futures rose 9% intraday.

Gold: -0.5%

• Subdued despite the softer Dollar in the run-up to this week's risk events including the FOMC Minutes and NFP jobs data.
• Spot gold resides in a narrow USD 2,647.49-2,625.26/oz range after dipping under Friday's USD 2,636.70/oz.
• Next level to the downside includes the 2nd Jan low (USD 2,621.77/oz).

Copper: +1.1%

• On a firmer footing amid the softer dollar, Chinese Caixin Services PMI also has provided some tailwinds.
• Copper off best levels amid a choppy risk mood.
• 3M LME copper resides in a USD 8,781.50-8,913.00/t range.