EUROPEAN COMMODITIES UPDATE: Choppy trade in crude as prices recoil from morning lows; metals remain subdued by the broader Buck

Analysis details (10:25)

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  WIT and Brent August futures whipsawed between gains and losses this morning, but in the grander scheme, prices are choppy within tight ranges after both contacts settled lower by USD 1.67/bbl and USD 1.92/bbl apiece yesterday as August Brent options expired ahead of Brent's August contract expiry on Friday. In terms of crude market fundamentals, the hawkish central bank narrative in G10 continues to cast a shadow over the demand side of the equation; Bank of America's CEO, for instance, yesterday said he expects a mild US recession in the first part of next year, while HSBC sees the US falling into recession this year.


• Overnight, crude prices were underpinned by the larger-than-expected draws in private sector crude and gasoline inventories data, but the rebound at the time was limited by the mixed risk appetite. During the European morning, prices edged lower despite a lack of fresh fundamental drivers at the time, with losses accelerating at downside breaches of the psychological levels, before rebounding back closer to session highs – again, newsflow was quiet. WTI fell under USD 67.50/bbl to a USD 67.05/bbl low before rebounding to session highs above 68.25/bbl. Brent declined to a 71.57/bbl low before recoiling back up to USD 73bbl.


• Elsewhere, spot gold looks heavy as DXY recovers some of its recent losses while participants look ahead to more central bank commentary from the ECB Sintra Forum. The yellow metal resides around USD 10/oz above the USD 1,900/oz mark at the time of writing with price action relatively muted this morning. Base metals meanwhile are mostly lower – in part due to the dollar, but also as Chinese markets lagged overnight after reports suggested the US is to impose more chip restrictions on China. 3M LME copper extends losses under USD 8,500/t and trades closed to USD 8,300/t at the time of writing.

28 Jun 2023 - 10:27- MetalsResearch Sheet- Source: Newsquawk