Commodities Daily - March 27, 2019

> Oil up on positive stock market momentum, Venezuelan blackout and mixed API data; EIA inventory update eyed. Following the API data, we expect the EIA to show a strong crude oil stock build of around 5 mln bbl on higher weekly imports, lower exports and after what could be considered an exaggerated 9.6 mln bbl draw reported the week before. However, we think that total petroleum stocks will be virtually unchanged w-o-w, meaning an ultimately neutral impact on Brent, which we see ending the day slightly below $68/bbl. We note that the initial reaction to a strong crude stock buildup would likely be sharply negative (a $0.5-0.8/bbl correction in Brent, in our view), as it would spook investors, who we believe will be willing to take profit following the almost $2/bbl surge in Brent this week.> Gold trading sideways despite stronger dollar. Today, ECB President Mario Draghi and other ECB officials are due to speak in Frankfurt, while the UK Parliament will see another Brexit vote. Barring any negative political developments (a greater likelihood of a no-deal Brexit being the most negative), gold could correct today owing to the stronger dollar and stabilization of Treasury yields.