Gold Futures Gain as Dollar Weakens, Geopolitical Tensions Mount — Market Talk

Brent crude oil futures fell to $72.5 per barrel on Monday as concerns over a potential global trade war and rising geopolitical tensions weighed on the market.

A heated meeting between US President Donald Trump and Ukrainian President Volodymyr Zelenskyy fueled uncertainty over a possible peace deal.

During the talks, Trump warned Zelenskyy to negotiate or risk losing US support, prompting Zelenskyy to leave before a scheduled press conference.

Meanwhile, impending US tariffs on imports from Canada, Mexico, and China—set to take effect on Tuesday—added to fears of slower global growth and weaker energy demand.

However, stronger-than-expected manufacturing data from China, the world’s largest crude importer, provided some support, raising hopes for increased fuel consumption.

Additionally, the tense US-Ukraine relations cast doubt on the likelihood of lifting sanctions on Russia’s oil sector, which could keep global supply tight in the near future.

Germany could be in line for a significant fiscal impulse should leading parties agree on a new funds for defense and infrastructure, Deutsche Bank's Robin Winkler says in a note. The CDU/CSU and SPD are in discussions to set up two off-budget funds amounting to about 20% of GDP jointly, according to news reports over the weekend. "This would be about as much money as the country has invested in East Germany since reunification. In other words, it would be a fiscal regime shift of historic proportion," Winkler says. There is, however, no confirmation of the numbers. And while the infrastructure fund promises a significant cyclical boost to the German economy from 2026 onwards, much defense spending would go toward arms procurement abroad, he says. (edward.frankl@wsj.com)

Oil prices edge lower amid uncertainties surrounding a Ukraine peace deal and U.S. tariffs, but losses are limited by upbeat manufacturing data from China. In early trade, Brent crude falls 0.5% to $72.43 a barrel, while WTI is down 0.6% to $69.35 a barrel. "Making a peace deal seems more distant than a week ago," ING analysts say. "This is altering energy-market hopes for an easing of sanctions." Markets are also on edge due to looming U.S. tariffs on Canada and Mexico, which could be lower than the planned 25%, and an additional 10% on China set to take effect on Tuesday. Meanwhile, China's manufacturing activity accelerated in February, reigniting optimism for fuel demand in the top crude importer. Traders are now awaiting details on fiscal stimulus measures as China's annual parliamentary meeting starts on Wednesday. (giulia.petroni@wsj.com)

US natural gas futures fell below $3.8/MMBtu on Monday, the lowest in two weeks, pressured by record output and forecasts for milder weather.

Warmer conditions through mid-March are expected to reduce heating demand, allowing utilities to withdraw less gas from storage.

Also, average gas production in the Lower 48 states rose to a fresh record of 104.7 bcfd in February, up from 102.7 bcfd in January, when cold weather temporarily reduced output.

Meanwhile, LNG exports remain strong, averaging 15.6 bcfd and nearing record levels.

Increased flows to Venture Global’s Plaquemines LNG plant, which reached 1.8 bcfd last week, contributed to the rise.

Storage levels remain about 12% below the five-year average due to earlier extreme cold

European natural gas futures rose over 5% to €46.5/MWh on Monday, reversing some losses from February’s 17.4% drop, the largest monthly decline in a year.

Prices climbed after tensions between US President Trump and Ukrainian President Zelenskiy cast doubt on a potential Russia-Ukraine peace deal.

Hopes for resumed Russian gas flows to Europe faded after their meeting failed to make progress.

On February 10, gas prices hit a two-year high of €59 due to falling stockpiles driven by colder weather, reduced wind power, and the loss of Russian gas via Ukraine.

Although withdrawals have recently slowed with warmer temperatures, traders are preparing for a possible cold snap later in March.

Some forecasts indicate the risk of sudden stratospheric warming, which could bring cold air to northern Europe and boost demand.

Meanwhile, tensions remain high as Russia reported seeking Turkey’s help after drone attacks targeted the TurkStream gas pipeline.

Malaysian palm oil futures fell around 1.5% to below MYR 4,500 per tonne, erasing gains from the prior session amid mounting concerns over weak exports.

Data from cargo surveyors showed that palm oil shipments in February dropped between 8.5% and 11%, extending January's downtrend.

Meanwhile, concerns emerged that demand could soften after March, once the month-long Ramadan festival concludes.

At the same time, the looming threat of US tariffs added to market uncertainty.

Providing some support, the Malaysian Palm Oil Board said exports to key buyer China will remain stable at around 3 million tonnes this year.

Additionally, upbeat manufacturing PMI data for February from the mainland helped cushion the market ahead of Chinese top legislative meetings, where policymakers are set to outline key economic priorities.

In top producer Indonesia, authorities lowered the crude palm oil reference price to USD 954.50 per tonne for March but kept the export tax unchanged at USD 124 per tonne.