EUROPEAN COMMODITIES UPDATE: Commodities bolstered across the board by a softer Buck

Analysis details (09:43)

WTI and Brent futures are once again choppy as prices initially fell at the resumption of electronic trade, before recovering as European players entered the fray. The downside overnight could’ve also been partly a function of holiday-thinned trade as Chinese players observe a long weekend alongside COVID woes in the region. Overall sentiment picked up heading into the European open and the Dollar also slid since then, and as such, WTI October briefly rose to levels close to USD 87/bbl from an overnight low under USD 85.50/bbl, whilst Brent November rose back above USD 93/bbl from a USD 91.20/bbl APAC trough. In terms of market fundamentals, the recent optimism on progress regarding the Iran nuclear deal is once again proving to have been misplaced, as Europe doubts Iran's sincerity, while Israel doesn’t think a deal will be struck before the US midterms in November. Sticking with geopolitics, Ukraine has made headway with regard to a counterattack against Russia, but some participants suggest keeping an eye on the state of Ukrainian energy infrastructure as Ukraine could remain dependent on Russia even in the event Russian troops pull out. Traders should also be aware of continuing whipsaw price action across the crude complex as this could trigger an emergency OPEC+ meeting after the de-facto head of Saudi warned about the threat of a “yo-yo” market. Elsewhere, the weaker Dollar is boosting metals across the board. Spot gold eyes its 21 and 50 DMAs to the upside at USD 1,733.70/oz and USD 1,741.62/oz. 3M LME copper meanwhile is re-eyeing USD 8,000/t to the upside amid the softer Dollar, although gains are somewhat limited as Chile’s Escondida mine workers agree to suspend a work stoppage which was planned for this week.

12 Sep 2022 - 09:43- MetalsResearch Sheet- Source: Newsquawk