Commodities Daily - March 4, 2019

> Oil down on demand-side factors despite declines reported in OPEC production, US rig count; trade deal optimism may support prices today. This morning, stock markets are rallying thanks to reports from multiple news sources last night that the US and China are finally near a trade deal. The deal would reportedly include China easing market access for the US in multiple key sectors and the US retreating on most or all of the measures against Chinese goods imposed over the last year or so. We think that this will support prices today and expect Brent to climb above $66/bbl later in the day, particularly given that today's agenda is quiet.> Gold falls below $1,300/oz on Friday, giving up 1.5% on the day. Volatility was high, with prices rising after the publication of weak US economic data but a selloff taking hold late in the evening (Moscow time). Over the weekend, Trump continued to criticize Fed policy. We expect gold to trade in a range of $1,280-1,295/oz today amid a flat dollar.> Base metals so far fail to find distinct trend despite trade deal optimism. Despite optimistic reports from Bloomberg and the Wall Street Journal that a deal ending the trade war may be imminent, copper (-0.5%) and aluminum (-0.7%) are both in the red so far today. Only nickel (+0.8%) and lead (0.1%) are higher as of this writing.