EUROPEAN COMMODITY UPDATE: Crude fails to retain geopolitical gains as broader sentiment sours

Analysis details (10:40)

Crude benchmarks are softer this morning, posting losses of circa USD 0.20/bbl for WTI and Brent; albeit, the benchmarks remain a similar magnitude above overnight lows. Downside in the space comes amid the intensification of pressure seen in Equities this morning, pressure that has most recently sent US futures firmly into negative territory. Prior to this, APAC upside that saw WTI and Brent surpass USD 86.00/bbl and near USD 89.00/bbl respectively, was driven by ongoing and known geopolitical themes; upside that still leaves around USD 1.00/bbl of upside before we retest last week’s peaks. To recap, the UK Foreign Office has taken the decision to begin removing some embassy staff from Kyiv, Ukraine, following the US removing families of staff. In contrast, the likes of Germany have not deemed such a move necessary. Language between NATO and Russia remains tense but for the most part in-fitting with their known stances that has seen NATO announce that allies are to send additional ships/jets to eastern-Europe, placing forces on ‘standby’. In response, Russia reiterated it would respond if any additional US military is deployed. Elsewhere, two Houthi ballistic missiles were intercepted by the UAE, with no casualties reported. Finally and most recently, 13 Chinese military craft entered Taiwan's ADIZ on Monday. Moving to metals, spot gold and silver are diverging modestly with the yellow metal bid on the risk tone and residing comfortably above a multitude of DMAs between USD 1795-1815/oz; for reference, the yellow metal is holding above USD 1835/oz. Silver has continued to dip since it briefly surpassed the 200-DMA at USD 24.59/oz on the 20th, failing to hold this on the close though, and subsequently unsuccessfully tested this mark on the following session. Finally, LME Copper is pressured on the broader risk tone continuing to drift from the USD 10k mark.

24 Jan 2022 - 10:40- EnergyResearch Sheet- Source: Newsquawk