EUROPEAN COMMODITIES UPDATE: Commodities subdued across the board by the Buck

Analysis details (10:55)

WTI and Brent November futures remain subdued in early European trade following last week’s recession-induced losses, with the German Ifo Survey this morning echoing the same tone seen across the Flash PMIs last week, with the firmer Dollar remaining a major headwind for commodity markets, not to mention the raft of central bank rate hikes seen last week. Desks remain cognizant of potential OPEC+ intervention given the slide in price and reports over the last couple of months that Saudi is said to be targeting USD 100/bbl. That being said, there hasn’t been much noise out of OPEC+ despite Brent Nov losing ground under USD 90/bbl. “If the flat price weakness persists, we will need to keep a lookout for possible OPEC+ intervention. The group has made it clear in recent months about the possibility of further action given the apparent disconnect between the physical and the paper market. If it is not there already, the market is trading towards levels where OPEC+ will be getting uneasy. The group are scheduled to meet next week. This could be an interesting meeting”, analysts at ING suggest. Elsewhere, the Czech Industry Minister says nations will agree on the EU energy proposals at the energy ministers meeting on Friday. Over to metals, spot gold trades in tandem with the Buck and sees resistance at around USD 1,650/oz after falling to USD 1,627/oz as a casualty of the Sterling flash crash overnight. LME metals are softer across the board with 3M copper futures having a hard time reclaiming USD +7,500/t status with upside capped by the Buck.

26 Sep 2022 - 10:55- Research Sheet- Source: Newsquawk