EUROPEAN COMMODITIES UPDATE: Choppy trade in crude while precious metals are lifted by trade uncertainty

Crude Oil: WTI Aug +0.3%, Brent Sep +0.3%

• Upward bias in choppy but contained trade after President Trump said he plans to make a “major” statement on Russia on Monday, whilst the European Commission is expected to propose a floating Russian oil price cap as part of the 18th sanctions package, according to EU sources cited by Reuters.


• Sticking with geopolitics, Israeli PM Netanyahu said he hopes they can complete a deal within a few days, while he stated that Iran is now behind by several years (referring to nuclear) and they will get peace soon with Arab neighbours, according to an interview with Newsmax.


• Trade updates keep oil markets in a state of angst. The EU will receive a tariff letter from the US today, President Trump suggested. US Secretary of State Rubio met with his Chinese counterpart Wang Yi in Malaysia today (no updates on this). Meanwhile, Canada was hit with a 35% tariff overnight.


• On the oil policy front, no move was seen on reports that there have been no talks related to a possible OPEC+ pause of the increments, "all options are on the table for now," according to Kpler.


• This follows Bloomberg sources yesterday, which suggested OPEC+ is reportedly discussing pausing the output hike from October. Saudi Arabia reportedly already has a tentative plan to complete the revival of a 2.2mln BPD in September, with another monthly tranche of 550k barrels. Delegates via Bloomberg added that OPEC+ will likely wait for some time before moving on to reversing another layer of halted production, which amounts to some 1.66mln BPD. On these sources, ING said, "This doesn’t change our outlook for the market, as we had assumed OPEC+ would hike supply all the way through until the end of September. These increases should move the global market into a large surplus in the fourth quarter, intensifying downward pressure on prices. For now, though, the market remains relatively tight through the northern hemisphere summer."


• Elsewhere, the IEA OMR trimmed its 2025 world demand growth forecast by 20k BPD to 700k BPD from 720k BPD, and cut its 2026 demand growth forecast by 20k BPD to 720k BPD from 740k BPD. IEA also said world oil supply to rise by 2.1mln BPD in 2025 following the latest OPEC+ hike (prev. forecast 1.8mln BPD rise) - no move seen in prices following this release. Note, the EIA STEO maintained their 2025 and 2026 forecasts, whilst the OPEC MOMR is due on the 15th July 2025.


• WTI resides in a USD 66.64-67.20/bbl range with its Brent counterpart in a USD 68.65-69.21/bbl range.

Precious Metals: Gold +0.6%, Silver +1.1%, Palladium +1.6%

• Firm gains across precious metals despite the stronger dollar, but propped up by haven flows amid trade uncertainty, with the EU set to receive a tariff letter from the US today, while US Secretary of State Rubio will meet his Chinese counterpart Wang Yi in Malaysia today, and Canada was hit with a 35% tariff overnight.


• Spot gold currently trades in a USD 3,321.91-3,344.13/oz parameter after convincingly mounting the 50 DMA (USD 3,325.59/oz) as it eyes the July 8th peak at USD 3,345.95 and then the 3rd July high at USD 3,365.92/oz.

Base Metals: 3M LME Copper -0.6%

• Mixed trade across base metals amid trade uncertainty, with the EU set to receive a tariff letter from the US today, while US Secretary of State Rubio will meet his Chinese counterpart Wang Yi in Malaysia today, and Canada was hit with a 35% tariff overnight.


• Upside in the complex is capped by the broader cautious tone as markets await the next macro impulse, likely in the form of more US tariffs letters.


• Overnight, Dalian iron ore ended trade higher by over 2% with traders citing speculation of a Chinese crackdown on steel overcapacity.


• Note, Chinese activity data will be released next Tuesday - the focus will be on China’s Q2 GDP, with the latest Reuters poll forecasting Q2 Y/Y growth at 5.1% (vs 5.4% in Q1) and Q/Q at 0.9% (vs 1.2% in Q1). The YTD Y/Y rate is seen at 5.6% (prev. 5.8%).

11 Jul 2025 - 09:55- ForexGeopolitical- Source: Newsquawk