EUROPEAN COMMODITIES UPDATE: Energy firmer but base metals mixed amid tariff threats

Crude Oil: WTI Mar +0.8%/Brent Apr +0.8%

• A firmer session this morning after yesterday's price action which saw oil prices fall amid a broader risk-off move in equity markets - which saw WTI settle with losses of USD 1.49/bbl and Brent lower by USD 1.37/bbl.


• The complex is taking a breather from yesterday's losses, whilst prices could also be underpinned to an extent from reports that protesters at Libya's Es Sidra port prevent tankers from loading, according to engineers cited by Reuters - Sidra is Libya's largest oil depot, reportedly shipping some 447k BPD. Furthermore, protesters reportedly halted oil loading operations in Libya's Ras Lanuf port.


• On the trade front, there were reports that President Trump plans to impose tariffs on steel, aluminium, and copper imports. Additionally, Treasury Secretary Bessent is reportedly advocating for a 2.5% universal import tariff, which would be gradually increased, according to the FT.


• Elsewhere, Saudi's Energy Minister met with Iraqi and Libyan counterparts and discussed efforts to support stability in energy markets, according to the Saudi state news agency.


• On that note, oil traders expect OPEC+ to stick with its current supply policy at a review meeting next week, resisting pressure from US President Trump to open the taps and bring down crude prices, according to a survey by Bloomberg.


• Ahead, there is little of note on the docket but the weekly Private Inventory data will be released after the US close.


• WTI Mar currently resides in a 73.08-73.87/bbl range while Brent Apr resides in a USD 76.12-76.90/bbl parameter.

Nat Gas: Dutch TTF +1.7%, US nat gas -1.4%

• Dutch TTF is on a firmer footing this morning after declining 3.7% yesterday. This decline was influenced by discussions about potential Azeri gas transit flows through Ukraine and a slowdown in storage withdrawals.


• EU gas storage levels are currently around 56% full, which is below last year’s 72% at this time and the five-year average of 63%, according to ING.


• Elsewhere, the Slovakian Foreign Minister said they welcome the European Commission's statement on gas supplies through Ukraine and see Ukraine's willingness to discuss transit of non-Russian gas as a return to a solution they have proposed, such as Azeri gas.

Precious Metals: Gold +0.1%, Silver -0.3%, Palladium +0.3%

• Mixed/flat trade across precious metals as prices take a breather from yesterday's volatility and with newsflow somewhat light during European hours awaiting any impulse from Wall Street,


• Furthermore, the FOMC is due tomorrow and thus traders could be cautious heading into the event.


• Analysts at ING suggest "In precious metals, gold also declined yesterday as the global rout in technology stocks, sparked by the Chinese AI start-up DeepSeek's breakout success, prompted traders to cover margins. Still, gold is up more than 4% so far this year and we believe trade frictions and geopolitical concerns will push it to another record high this year."


• Spot gold currently resides in a USD 2,734.81-2,745.30/oz range and well within yesterday's USD 2,730.56-2,772.74/oz parameter

Base Metals: 3M LME Copper -0.4%

• Mixed trade across metals amid an overall cautious tone in the market and with Trump tariff threats continuing to cap gains.


• Industrial metals began the week on a weaker note, with copper retreating from a two-month high due to ongoing concerns about China’s economic growth. Weak factory activity and profit data in China overshadowed Beijing’s support measures announced last year.


• Adding to bearish sentiment, US President Trump is reportedly set to impose tariffs on steel, aluminium, and copper imports. The US relies on imports for 13% of iron and steel, 44% of aluminium, and 46% of copper, according to ING citing USG.


• 3M LME copper resides in a USD 9,016.00-9,115.50/t range at the time of writing.

28 Jan 2025 - 09:55- MetalsEU Research- Source: Newsquawk