EUROPEAN COMMODITIES UPDATE: Base metals saw a surge towards the end of Chinese trade, while crude is subdued by Iraqi-Turkish talks on the resumption of flows

Analysis details (10:04)

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  WTI and Brent October futures are subdued and fail to benefit from the broader constructive risk sentiment. Some desks cite the weakness in oil markets to reports that Iraq’s oil minister arrived in Turkey on Monday to discuss the resumption of Iraqi oil exports from Turkey’s Ceyhan oil terminal. This follows the halt of around 450k BPD of flows in the region in March following a legal dispute between Turkey and Iraq. Elsewhere, eyes remain on the US hurricane season after tropical depression Nine was upgraded to Tropical Storm Harold, although after the trajectory of the tropical storm was revised to a narrower path than was expected over the weekend. On the LNG front, there is little to note in terms of fresh developments. Woodside Energy CEO overnight said that talks with gas workers remain constructive despite increasingly bitter rhetoric, and added that the market reaction to potential strikes was "fairly irrational" and a sign of market fragility. As a reminder, Woodside workers will be meeting with unions tomorrow for labour negotiations. WTI October has moved back under USD 80/bbl (vs high 80.32/bbl) while its Brent counterpart tets USD 84/bbl to the downside(vs high 84.64/bbl). Nat gas futures are choppy but ultimately softer intraday, with the Dutch TTF October contract back under EUR 45/MWh and the US Henry Hub October future -1% at the time of writing, trading just above USD 2.70/MMBtu.


• Over to metals, spot gold is largely trading in tandem with the Dollar and had multiple attempts at topping USD 1,900/oz this European morning, with levels to the upside including the 200 DMA at USD 1,907/oz. Base metals are interesting as the complex was trading with a mild upward bias around the time of the Japanese equity close before prices surged alongside broader Chinese markets heading towards the final hours of trade in China, with little in terms of fresh headlines to drive the price action. Headlines suggested Dalian and Singapore iron ore futures both extended on gains whilst 3M LME copper rose from levels around USD 8,300/t to a high of around USD 8,370/t in the final hour of the Chinese session. As a side note, the BRICS summit will be taking place between August 22nd and August 24th - the main theme of the summit will be the proposed expansion of the bloc (full Newsquawk analysis can be found here).

22 Aug 2023 - 10:09- Research Sheet- Source: Newsquawk