OCTOBER 6, 2025 AT 09:10 AM
EUROPEAN COMMODITIES UPDATE: Benchmarks pare recent losses post-OPEC+, XAU continues to climb
Source
SectionMarket Analysis
Crude Oil: WTI +1.2%, Brent +1.1%
- Crude benchmarks have pared back some of last week’s losses following OPEC+ meeting where the group agreed to raise production by 137k, which is seen as a modest hike compared to the 500k bpd hike reported last week.
- Benchmarks gapped higher and extended to a peak of USD 62.04/bbl and USD 65.71/bbl in WTI and Brent respectively before oscillating in a c. USD 0.60/bbl range.
- As mentioned, OPEC+ agreed to raise production by 137k over the weekend. The two largest oil producers, Russia and Saudi Arabia, have opposing views with Russia wanting to protect oil prices while Saudi Arabia opted for a larger hike as it aims to regain market share.
- On geopolitics, Iran’s foreign minister said that Iran is ready to resume efforts to resolve its nuclear standoff amid UN sanctions being reimposed on the country.
- Following Hamas agreeing to release all Israeli hostages, Israel and Hamas are to begin negotiations later today in Egypt.
Precious Metals: XAU +1.4%, XAG +1.3%
- Spot gold continues to extend new ATHs, reaching USD 3950/oz, as growing fiscal concerns in major economies and political concerns in the US add to the momentum of the “debasement trade”.
- Thus far, XAU has reached a peak of USD 3950/oz before pulling back to USD 3940/oz. Markets await updates on the US government shutdown.
Base Metals: 3M LME Copper -0.8%
- Base metals briefly extended on last week’s gains before reversing lower amid lack of newsflow, with China still away on holiday. 3M LME Copper extended to USD 10.8k/t early in the APAC session before dipping to a low of USD 10.34k/t.
- Base metals are being weighed on as Indonesia continues to crack down on illegal mining, with the country handing over six seized tin smelters to state miner PT Timah.
- Amid this pullback, there is a wide consensus that the disruption in copper production will extend prices higher with Goldman Sachs expecting 3M LME copper to extend above USD 11k/t from 2028 onwards.