EUROPEAN COMMODITIES UPDATE: Commodities optimistic on China’s reopening and oil eyes OPEC+ sources

Analysis details (10:23)

WTI and Brent futures are firmer intraday as the risk tone remains constructive and the Dollar declines, with WTI Jan back above 79/bbl and Brent Feb above USD 85/bbl at the time of writing after settling modestly higher yesterday. From a crude-specific standpoint, eyes turn to the OPEC+ confab on Sunday before the reopening of futures trading. Market expectations are currently split on whether the group of oil producers will hold production targets steady or opt for another further cut. A poll by Bloomberg conducted in the week beginning 28th November suggested ten out of 16 respondents expect a production cut, ranging from 250k BPD to 2mln BPD. The most recent sources have been leaning towards an unchanged output policy in December. The December meeting is expected to be conducted virtually - signalling little likelihood of a policy change, sources suggested. Given the high market volatility and uncertainty ahead, the group may opt to revert to monthly meetings. Before OPEC, crude markets will tackle the fallout from Fed Chair Powell today, US PCE tomorrow, US NFP on Friday, and China’s COVID updates throughout the week, with the most recent reports suggesting Beijing is to allow some residents to skip mass COVID testing. Elsewhere, spot gold grinds higher as DXY softens and the risk tone turns less constructive, with the yellow metal rising north of USD 1,750/oz and towards Monday’s USD 1,763/oz peak. Base metals are firmer across the board on hopes China will ease its Zero-COVID parameters, with 3M LME copper extending on overnight gains to levels north of USD 8,100/t during the European morning.

30 Nov 2022 - 10:25- Research Sheet- Source: Newsquawk