EUROPEAN COMMODITIES UPDATE: Commodities lower on month end and ahead of weekend uncertainty

Crude Oil: WTI Apr -1.0%, Brent May -0.8%

• Crude futures are lower on Friday, giving back some of yesterday's gains which saw the complex settling at highs amid a couple of bullish factors - including Trump tariffs and OPEC+ sources, and despite the firmer Dollar on Thursday.


• WTI and Brent on Thursday were boosted on US President Trump's post on Truth, whereby he said proposed tariffs (on Canada/Mexico) are scheduled to go into effect on March 4th, and "China will likewise be charged an additional 10% Tariff on that date". Trump later confirmed there will be an additional 10% tariff on China, clarifying that there will be a 10+10 tariff on China, so 20%.


• Thereafter, benchmarks got another intraday boost to peaks on Reuters sources reporting that OPEC+ is hesitant to go ahead with the planned April oil output hike due to uncertainty over sanctions and tariffs. Sources add Russia and UAE would like to proceed with the April oil output hike and other members, including Saudi Arabia favour a delay.


• On the geopolitical footing Trump said had very good talks with Russia and Ukraine, and Russia has been acting very well and is well advanced on a peace deal. Ukrainian President Zelensky is due at the White House today, where he is expected to sign the minerals deal, as he hopes to gain US backing in order to end the war.


• The European Friday morning saw little in terms of fresh catalysts to spur losses, but it could simply be a case of participants locking in profit ahead of US PCE, on month end, and ahead of an uncertain weekend.


• WTI May resides in a USD 69.45-70.17/bbl range at the time of writing, whilst Brent May sits in a USD 72.76-73.37/bbl range.


• European gas prices are holding a mild upward bias in a continuation of yesterday's price action which trimmed a bulk of the recent losses pinned on milder-than-expected weather - with Dutch TTF Apr on either side of EUR 46/MWh at the time of writing.

Precious Metals: Gold -0.5%, Silver -0.3%, Palladium -0.4%

• Subdued trade across precious metals as European players reacted to the surge in the Dollar yesterday amid US President Trump's tariff rhetoric, with nothing new to add during European hours.


• Spot gold resides in a USD 2,851.11-2,885.24/oz range at the time of writing after dipping under yesterday's trough (USD 2,867.79/oz), with the point of support being the 6th February low (USD 2,834.27/oz).

Base Metals: 3M LME Copper -0.7%

• Lower across the board amid the risk-off sentiment amid Trump's tariff rhetoric which seeks to impose an additional 10% tariff on China on top of the February 4th 10% levy.


• March 4th will see the fentanyl-related US tariffs take effect against Canada and Mexico, and now with an additional 10% on China. As a recap, Canada and Mexico saw their February 4th tariffs paused for 30 days to pave the way for negotiations, whilst the 10% tariff on China went into effect on that day.


• Next week also sees the China Two Session - traders will be on the lookout for signs of stimulus, although Beijing will likely not go full throttle on stimulus given the uncertainties arising from US tariffs, with US President Trump recently threatening an additional 10% levy on China from March 4th on top of the 10% imposed on February 4th. “March is too early for any major policy stimulus, as policymakers need more time to see the actual impact of the trade war 2.0.,” said Macquarie.


• 3M LME copper fell further below USD 9,500/t and resides in a USD 9,331.90-9,405.65/t range at the time of writing.

28 Feb 2025 - 09:55- ForexGeopolitical- Source: Newsquawk