EUROPEAN COMMODITIES UPDATE: Commodities climb back as DXY retreats, whilst LME metals rally on source reports

Analysis details (11:05)

WTI and Brent front-month futures have been trimming losses throughout the European morning despite the firmer Dollar and risk-aversion across other markets, with the complex buoyed by reports that OPEC+ members are discussing a cut to output targets at the October 5th confab, whilst EU energy ministers gear up for a meeting on Friday. More on OPEC+, a volume for potential scaleback has not been telegraphed yet, although Reuters sources earlier this week suggested Russia will likely propose a 1mln BPD cut. Note, markets will likely see several sources reports heading into the meeting as the group tests the waters, and as a reminder, unanimity is needed to pass any proposals. Elsewhere, in Florida, Ian is weakening as it makes its way across the state, with the NHC downgrading Ian to a Tropical Storm in its latest update. Over in Europe, the European Commission is not putting forward a proposal for capping gas prices for tomorrow’s EU energy ministers’ meeting (as expected), but options will be discussed, with a Senior EU official suggesting the Commission is ready to propose an alternative gas price benchmark to Dutch TTF. WTI Nov is back around USD 82/bbl (vs low 80.34/bbl) with its Brent counterpart around the USD 89/bbl mark (vs low 87.33/bbl). Over to metals, the complex was initially weighed on by the broader USD strength, with spot gold trading on either side of USD 1,650/oz vs yesterday’s USD 1,661/oz. Elsewhere, 3M LME has trimmed its earlier as the USD pulled back, with the contract now inching closer to USD 7,500/t to the upside. Finally, Bloomberg sources suggested the LME is to consult on a potential ban of Russian metals, which sparked a rally across some metals such as aluminium.

29 Sep 2022 - 11:05- Research Sheet- Source: Newsquawk