EUROPEAN COMMODITIES UPDATE: Choppy action in crude, tentative trade in gold, and a mixed picture for base metals

Analysis details (10:51)

WTI and Brent front-month futures trimmed the gains made during the APAC session as sentiment was hit on China imposing unspecified sanctions on House Speaker Pelosi. The complex saw losses yesterday amid the continuing growth concerns, somewhat fanned by China abandoning its GDP growth target this week. Furthermore, sources yesterday suggested that Saudi Arabia and the UAE could “significantly” boost output if there is a supply crunch – despite OPEC+ emphasising limited spare capacity. Over to geopolitics, China-Taiwan tensions have taken the foreground for now, with one eye on how the Chinese drills around Taiwan affect global trade – this morning the Taiwanese Transportation Ministry says no ships altered plans to enter or leave ports on Thursday and there is little impact on airport traffic following Chinese military drills. WTI resides around 88.75/bbl whilst Brent Oct trades near 94.50/bbl after both contracts settled lower by over USD 2/bbl apiece. Elsewhere, spot gold has fallen back under its 50 DMA (1,788/oz) at the time of writing, with the 10 DMA seen at 1,756/oz. The precious metals complex will be eyeing geopolitics for haven flows alongside Dollar-induced action at 13:30BST alongside the US jobs report. Finally, base metals are mixed but LME copper posts gains as it briefly rose above USD 7,800/t before pulling back on the Pelosi sanctions.

05 Aug 2022 - 10:51- Research Sheet- Source: Newsquawk