EUROPEAN COMMODITIES UPDATE: Another relatively contained session with catalysts light and the USD influencing slightly

Analysis details (10:45)

• Once again, a fairly contained session for the commodity space with crude little changed overall and metals just off Thursday’s best in limited newsflow.


• Crude specifically has been slightly choppy but is yet to meaningfully stray for the neutral mark with parameters particularly thin. Amidst this, the complex is on track to see the week out with upside just shy of USD 2.0/bbl amid the dovish reaction seen to US data and the constructive readings into the Chinese economy via data and corporates so far.


• In terms of newsflow, the main update has been the IEA OMR which maintained the prior report’s view of a 2023 record oil demand figure of 101.9mln BPD, an increase of 2mln. Within this, the agency highlights that the latest OPEC+ production cuts risk exacerbating the strain on market balance, which was already seen tightening in H2, and could push crude and product prices higher. A view that contrasts with the EIA’s STEO which forecasts “relative balance” for the coming year.


• More broadly, geopolitics is in focus as the Tass reports that the Russian Defence Ministry said the Pacific Fleet has been put on high alert in a surprise inspection while the US and South Korea are to stage air drills involving US B-52 bomber, according to Yonhap; details on both of these events are very light currently.


• Moving to metals, spot gold is steady though off best as the USD attempts to claw back from initial modest downside. As such, the yellow metal has dipped by around USD 10/oz from the overnight USD 2047oz peak, which is around USD 1/oz shy of the WTD best. Elsewhere, base metals are modestly firmer and similarly easing given the USD, as above, with broader catalysts light ahead of the US docket.

14 Apr 2023 - 10:47- MetalsEU Research- Source: Newsquawk