EUROPEAN COMMODITIES UPDATE: Crude pressured continuing Monday's bearish bias, XAU shines on tariff updates & growth concerns

WTI/Brent: -1.2%/-1.4%

• The crude complex was lower in the first session of the week after reports and subsequent confirmation that OPEC+ would go ahead with an April oil output increase. A bearish bias that remains in play.


• Prior to this, benchmarks were choppy as participants continued to focus on Trump tariffs and the US/Ukraine relationship, which were far from constructive.


• With these together, Brent futures settled lower by 1.6%, at USD 71.30/bbl, losses have continued in today’s session, with steady, and continuous downside throughout the European morning so far. Currently, WTI and Brent trade at lows of USD 67.43/bbl and USD 70.50/bbl respectively.


• As a reminder, tariffs on Mexico, Canada and China went into effect overnight, with Canada and China providing retaliatory responses.


• On the supply side, Bloomberg reported that Iraqi talks with oil firms hit a snag, delaying Kurdistan exports.


• Goldman Sachs sees downside risk to their USD 78/73 average Brent forecasts for 2025/2026 respectively and USD 74/68 for WTI. The desk estimates that Brent could drop to the low-to-mid USD 60s by end-2026.

Dutch TTF: -2.0%

• European natural gas prices strengthened yesterday, settling higher by over 2%, as hopes for a Ukraine peace deal dimmed despite ongoing mineral negotiations.


• Action in today’s session is largely one of consolidation, with the latest on the Ukraine front being the US withdrawing military aid (a development the Kremlin has welcomed) and thereafter more constructive language from Ukraine’s Zelensky who said “other steps will come soon” while a parliamentary official described Trump’s peacekeeping as “decisive” in ending the war.


• ING expects European gas prices will remain 'well supported,' given that EU storage levels are below 38% full, compared to 62% last year and a five-year average of 49%. They note the risk to this view would be a relaxation in storage targets or a peace deal that leads to the resumption of some Russian pipeline gas flows to Europe.

Gold: +0.8%

• Firmer on the session. At a USD 2921/oz peak, a figure which surpasses last Thursday’s best with USD 2930, 2949 & 2953/oz the next points of near term resistance before the USD 2956/oz ATH is looked to.


• Action is being driven by the latest trade tensions after the US imposed measures on Canada, China and Mexico as guided. Measures which have sparked retaliation from Canada and China.


• As a reminder, the State of the Union address is tonight from which we are attentive to anything from POTUS on the above factors in addition to geopolitics (relations between the US and Ukraine remain strained and serve as another bullish factor for gold).


• Another factor potentially underpinning gold is the grind higher in Fed easing expectations with markets now fully pricing in 75bps of easing by end-2025. Pricing which comes on the back of the above factors and domestic growth concerns continued to ramp up; reminder, the ISM on Monday was soft and sparked another sizable cut to the Atlanta Fed’s GDPnow forecast for Q1.

3M Copper: -0.3%

• On the backfoot, dented by the US imposing an additional 10% tariff measure on China which has caused the nation to respond with measures of its own in a 10-15% tariff band, among other points.


• Action which has weighed on base metals across the board with 3M LME Copper specifically down to a USD 9.3k low vs a USD 9.4k close on Monday.

04 Mar 2025 - 10:25- ForexGeopolitical- Source: Newsquawk