EUROPEAN COMMODITIES UPDATE: Commodities boosted by sliding Buck and China’s COVID easing

Analysis details (10:34)

WTI Dec and Brent Jan are extending the gains seen overnight which were sparked by China easing its COVID measures. To recap, China's National Health Commission released adjusted protocols for COVID prevention and control with quarantine for close contacts cut to 5 days of centralised isolation and 3 days of home quarantine from 7 days of centralised isolation and 3 days of home quarantine. China is also to cut COVID quarantine for inbound travellers from 10 days to 8 days and it cancelled the circuit breaker for inbound flights, according to Reuters. With the demand side of the equation now looking rosier, WTI Dec made its way above USD 89/bbl (vs low 86.18/bbl) and Brent topped USD 96.50/bbl (vs low 93.69/bbl). Elsewhere, the European Commission (EC) upgraded its 2022 GDP growth forecast in its Autumn release to 3.2% from the 2.7% projected in the Summer interim forecast -“Growth is expected to return to Europe in spring, as inflation gradually relaxes its grip on the economy. However, with powerful headwinds still holding back demand, economic activity is set to be subdued, with GDP growth reaching 0.3% in 2023 as a whole in both the EU and the euro area.”, according to the EC. Over to the Middle-East and head of the OPEC+ confab in December, the Saudi Energy Minister said OPEC+ will remain cautious on production, and the group will not lose sight of what the oil market needs. Over to metals, the recent decimation in the Dollar index has boosted the complex, with spot gold extending gains above its 100 DMA (1,714/oz) and above the USD 1,750/oz mark. Base metals are also firmer across the board with added tailwinds from China’s easing of COVID measures – 3M LME copper eyes USD 8,500/t to the upside from a USD 8,271/t intraday base.

11 Nov 2022 - 10:36- Research Sheet- Source: Newsquawk