EUROPEAN COMMODITIES UPDATE: Cautious trade with catalysts thin thus far
Analysis details (10:35)
- Crude benchmarks are under modest pressure, with both volumes and newsflow limited ahead of an action-packed week of macro risk events. Currently, WTI and Brent are lower by around USD 0.30/bbl and remain in proximity to the YTD lows of USD 70.08/bbl and USD 75.11/bbl respectively.
- In terms of catalysts, weekend updates focused on remarks from Saudi ministers, who talked around and supported the recent OPEC+ decision; as a reminder, the group isn’t due to formally reconvene again until the summer, but has kept the option for an ad-hoc/interim meeting open. Elsewhere, the opening theme in China continues, though a Beijing official said medical services and drug supplies are under pressure within the city, via Bloomberg. More broadly, the USD is currently softer but rangebound with the benchmarks unable to derive any lasting impetus from this.
- Looking ahead, BofA says Brent could rebound to USD 90/bbl on account of a Fed pivot and China reopening while CNOOC’s sees China’s energy demand rebounding next year as the rollback of Covid restrictions helps the economy recover, Bloomberg reports.
- Moving to metals, spot gold and silver are modestly pressured as the overall tone turns incrementally more constructive, though remains cautious overall, as the session progress; though, as with crude, this action is limited with ranges thin and spot gold yet to make a convincing move away from USD 1790/oz. Given the cautious undertones, base metals remain lower with LME Copper posting downside of around 1.0% on the session.
12 Dec 2022 - 10:40- MetalsResearch Sheet- Source: Newsquawk
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