MARKET MOVEMENTS:
-- Brent crude oil is 0.3% lower at $81.91 a barrel.
-- European benchmark gas rises 2.1% to EUR58.13 a megawatt
hour.
-- Gold futures are down 0.4% at $1,924 a troy ounce.
-- Three-month copper is 0.6% higher at $9,091.50 a metric
ton.
-- Wheat futures are down 0.7% at $7.56 a bushel.
TOP STORY:
Europe Cuts Addiction to Russian Energy, Yet Fuel Scramble
Continues
Europe's dependence on Russian energy is drawing to a close,
ending a decadeslong power imbalance and leaving the continent
racing to squirrel away fuels and find alternative supplies.
The final act of separation: On Sunday, the European Union and
the U.K. will bar imports of Russian fuels such as diesel and
gasoline. The move follows a ban on Russian crude imports in
December. Coal imports stopped last summer. Natural-gas flows from
Siberia, once the lifeblood of European industry, have
dwindled.
Taken together, the moves have allowed Europe to wean itself
from Russian energy almost entirely in less than a year since the
invasion of Ukraine. The flow of Russian gas through pipelines to
the EU and U.K. last month was almost 90% lower than in January
2021, according to commodities data firm ICIS.
OTHER STORIES:
Food Prices Declined for Tenth Month in a Row in January, says
UN
Food prices have fallen for the tenth month in a row, as higher
exports of wheat from Russia and Australia ease inflationary
pressures, a report published Friday by the Food and Agriculture
Organization of the United Nations said.
The FAO's food-price index, a closely watched barometer of
global food prices, averaged 131.2 points in January 2023, down 1.1
points or 0.8% from December's reading. Prices are now down 17.9%
from the peak in March 2022, when the index hit an all-time high of
159.7 points following Russia's invasion of Ukraine.
The U.N. body said that much of the easing had been led by lower
wheat prices but that grain prices overall were more or less
unchanged from December with a FAO cereal price index reading of
147.4 points in January, a rise of just 0.1%. Wheat prices had
fallen 2.5% during the month on higher Russian and Australian wheat
exports, but strong demand for corn had meant flat grain prices
overall.
MARKET TALKS:
Palm Oil Firms Amid Strong Soybean Oil Prices
1002 GMT - Malaysian palm-oil prices closed higher, tracking
soybean oil's gains on the Dalian Commodity Exchange, a Kuala
Lumpur-based trader says. The oils often trade in tandem as they
are used in similar products. However, palm-oil gains were likely
capped due to declining demand, he adds. The Bursa Malaysia
Derivatives Exchange contract for April delivery closed MYR97
higher at MYR3,848 a metric ton. (yiwei.wong@wsj.com)
--
Anglo American's Investment Case Is Compelling Despite 2022
Operational Issues
0952 GMT - Anglo American delivered a strong 4Q result as it met
its full-year production targets and backed its 2023 production and
cost guidance, analysts at Jefferies say in a note. Diamond,
copper, coal and manganese production for the year rose, but
platinum group metals production fell due to lower grades and
planned infrastructure closures, as did iron ore, and nickel, which
was hurt by a maintenance shutdown and high rainfall, the analysts
say. "Despite operational issues in 2022, which are arguably
already priced in as these shares are down nearly 20% over the last
9 months, the longer-term investment case for Anglo is compelling,"
the analysts say. Jefferies rates the stock buy and has a 3,387
pence target price. (anthony.orunagoriainoff@dowjones.com)
--
Oil Edges Down Ahead of Ban on Russia Oil Products
0846 GMT - Oil prices tick lower despite an impending European
Union ban on Russian oil product exports which is expected to
tighten crude markets further. Brent crude oil edges down 0.2% to
$82.00 a barrel while WTI weakens 0.3% to $75.70 a barrel. The EU's
ban is set to come into force Sunday. Ample time to prepare and
strong Russian exports of crude and oil products ahead of the ban
are keeping prices in check, ING says in a note. "Despite this
imminent disruption to flows, the market appears relatively
calm...the market has had a significant amount of time to prepare
for the ban. We have seen strong inflows of middle distillates into
Europe ahead of Feb. 5," ING says. (william.horner@wsj.com)
--
Metals Mixed Ahead of Jobs Report
0832 GMT - Metals prices are mixed, with nonfarm payroll data
due later. Three-month copper is up 0.4% to $9,070.50 a metric ton,
while aluminum is 0.5% lower at $2,591 a ton. Meanwhile, gold is
down 0.2% to $1,927.20 a troy ounce. This week has been a bumper
data week, with more positive data out of China meeting Western
central banks indicating more monetary tightening may be needed in
March as they seek to taper inflation. "Despite Chinese growth
outperforming, slowing economic growth elsewhere globally will
result in muted global demand growth for metals," Fitch Solutions
says in a note. It sees metal prices climbing this year on Chinese
demand but elsewhere the picture looks less clear.
(yusuf.khan@wsj.com)
--
Iron Ore Futures Decline as Steel Demand Weakens
0120 GMT - Chinese iron ore futures decline as demand for the
steel ingredient weakens. "The demand for steel is still weak, with
the inventory replenishment of steel mills slow," say CFC Financial
analysts in a note to clients, adding that iron ore prices are
likely capped. Prices for commodities such as iron ore, steel and
coal have fallen in the last few days and CFC Financial believes
that is due to faded market expectations. Iron ore contracts on the
Dalian Commodity Exchange are lower across the board, with the
most-traded May contract down 1.6% at CNY843.0 a ton.
(bingyan.wang@wsj.com)
Write to Barcelona Editors at barcelonaeditors@dowjones.com
(END) Dow Jones Newswires
February 03, 2023 07:33 ET (12:33 GMT)
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