EUROPEAN COMMODITIES UPDATE: A firmer Dollar hampers upside across oil and metals ahead of a slew of CB speakers alongside US data

Analysis details (09:45)

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  WTI and Brent front-month futures are softer intraday following some overnight consolidation after yesterday’s risk-led rally. As a reminder, crude futures settled around USD 2.00/bbl higher apiece in what was seemingly a function of risk-on sentiment as opposed to any crude-specific catalyst, although some desks cited potential optimism in debt ceiling talks. In European hours, the complex is somewhat cages and fails to piggy-back on the optimism seen in stocks, potentially as the rising Dollar index caps upside for prices. “The oil market continues to be driven by external developments, rather than fundamentals”, say the analysts at ING, with WTI June currently around USD 72.50/bbl (in a USD 72.36-83/bbl range) while Brent July resides around 76.70/bbl (in a USD 76.48-93 range). Ahead, price action could be dictated by the broader sentiment and US data later in the absence of other macro catalysts. Meanwhile, natural gas futures are softer on both sides of the pond, with Dutch TTF seeing slightly deeper (-1.6%) losses vs US Henry Hub (-0.4%). “More recent changes in the forward curve suggest the market is becoming less concerned about the next heating season”, ING highlights, with EU gas storage around 64% full at the moment (vs 41% seen this time last year and vs 46% 5yr average).


• Over to metals, spot gold bears the brunt of a firmer Dollar and broader risk appetite, which resulted in the yellow metal dipping back under USD 1,975/oz in recent trade, with the next level to the downside being the 21st April low (USD 1,971.70/oz) before the 19th April trough (USD 1,969.31/oz). Base metals are trading off a similar theme, with modest pressure emanating from the firmer Dollar. 3M LME copper fell back to a high of USD 8,323.50/t back under USD 8,250/t.

18 May 2023 - 09:45- MetalsEU Research- Source: Newsquawk