EUROPEAN COMMODITIES UPDATE: Choppy trade in oil and metals are under pressure

Analysis details (10:20)

WTI and Brent front-month futures are choppy within recent ranges as the overarching themes - of Russia-Ukraine and China’s economic slowdown - continue to keep the situation fluid, amid other factors. Starting with Russia – President Putin presented a very short Victory Day speech, in which he made no major announcements, and some have framed it as a softer tone than expected; there were speculations that Putin will announce an escalation of military action. Elsewhere, EU ambassadors met on Sunday and failed to agree on a Russian oil ban deal, according to BBC's Parker. Ambassadors will meet again on Monday or Tuesday - Politico suggests most likely Tuesday. Deputy PM Novak was also on the wires and suggested Russian oil output was up in early May vs April and said the situation with Russian oil has stabilised. Novak added that Russia is considering expanding the capacity of oil-exporting ports and expanding East Siberia-Pacific Ocean Oil Pipeline. At the same time, reports noted that the Russian government sees the number of new Russian crude buyers growing, via Tass. On the China front, Jilin city, in northern China reported no new local COVID cases on Sunday, via Global Times, for the first time since early March. That being said, a Beijing spokesperson suggested the city’s epidemic is still at a high stage and the situation is severe and complicated. Elsewhere, Saudi Arabia lowered June Arab light oil prices to Asia to a premium of USD 4.40/bbl vs Oman/Dubai from a premium of USD 9.35/bbl, while it lowered the price to Europe to a premium of USD 2.10/bbl vs ICE brent from a premium of USD 4.60/bbl and kept the price premium to the US at USD 5.65/bbl vs ASCI, according to Reuters. Finally, the prospect of an immediate Iranian Nuclear Deal seems slim but the EU attempts a last-ditch effort to save the Iran nuclear deal with EU’s Foreign Policy chief Borrell said he was seeking a middle way to break the impasse, according to FT. It was also reported that EU’s Iran nuclear talks coordinator Mora will visit Iran on Tuesday, according to Nour News. It is also worth being aware of a magnitude 6.2 earthquake reported near Taiwan and Japan, although tsunami warnings have not yet been issued. Spot gold meanwhile remains pressured by yield dynamics and the firmer Buck; with the yellow metal dipping further under its 100DMA (USD 1,883/oz) to revisit lows from Thursday around USD 1,860/oz. Base metal prices are mostly softer with a narrower-than-expected Chinese trade balance and soured risk tone providing headwinds to the complex.

09 May 2022 - 10:19- EnergyData- Source: Newsquawk