Commodities Daily - April 3, 2019

> Oil ticks higher on reported US-China trade deal progress and mixed API data; EIA inventory report eyed. Later in the day today, we expect the EIA to report a strong crude stock build of 5-8 mln bbl on subdued refinery intake amid higher imports, with exports likely to remain below 3 mln bpd. However, strong refined product draws are likely to counterbalance this, meaning an ultimately neutral impact on Brent, which we expect to settle within a $69-70/bbl range. Still, such a strong build in crude stocks would likely spark a $0.5-0.8/bbl initial plunge in the Brent price, in our view, as it would spook investors, who we believe will be willing to take profit following the $2/bbl surge in Brent this week.> Gold continuing to hover around $1,290/oz. Donald Trump has leveled new criticism at the Fed. Meanwhile, after seven hours of discussion with the cabinet, PM Theresa May announced that the UK would need the April 12 deadline to be postponed. Given that the dollar is weaker this morning, we think that gold will manage to hold within the range of $1,290-1,300/oz today.> Base metal prices rising amid trade deal optimism. Prices on base metals have been climbing in the lead-up to the next round of trade negotiations between the US and China, which kicks off today in Washington. The Financial Times has reported that the sides are close to an agreement. Prices are up across the board today, with nickel (+1.5%) and zinc (+1.2%) leading the way. Copper is also in positive territory (+1.0%) ahead of next week's Cesco Week conference in Chile.