EUROPEAN COMMODITIES UPDATE: Commodities subdued but off worst levels as sentiment improves and the Dollar pulls back

Analysis details (10:59)

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  WTI November and Brent December futures are softer intraday as a function of the broader downbeat mood, with the contracts settling higher by USD 0.41/bbl and USD 0.21/bbl respectively yesterday before tilting into further losses during APAC hours – with Chinese markets still away for its domestic holiday. Price action throughout the European session thus far has been dictated by the broader market mood, which has clambered off worst levels as the bond rout stabilised and pared back a touch since the start of European hours. Macro newsflow thus far has been light, but oil traders look ahead to the OPEC+ JMMC meeting at 11:00 BST/06:00 EDT - policy change recommendations are not expected. Desks were more interested in the voluntary curbs Saudi and Russia announced earlier in the year and whether these will see any tweaks, although press releases from both nations suggested they will continue with the voluntary curbs at current levels (as expected). Thus, the JMMC is now expected to be a smooth affair with no fireworks. In the US, yesterday’s private inventories showed a headline draw of 4.2mln bbls (vs exp. -0.5mln) while the internals were more bearish (Gasoline +3.9mln vs exp. +0.2mln, Distillate +0.3mln vs exp. -0.3mln) - the weekly EIA inventories will be eyed for confirmation. WTI has dipped back under USD 89/bbl in sits within a USD 88.11-89.59/bbl range while its Brent counterpart trades around USD 90.50/bbl in a USD 89.83-91.21/bbl band.


• Over to metals, spot gold is flat and confined to a narrow USD 1,816.90-1,824.89/oz range but remains within yesterday’s parameters (USD 1,815.32-1,833.43/oz) as the yellow metals look for the next catalyst, with US ISM Services, ADP, and several central bank speakers still on the docket. Base metals are now flat after trimming deeper APAC losses, with the broader market move more constructive than it was overnight. 3M LME copper now meanders around USD 8,000/t after dipping under the key level to a USD 7,924/t trough overnight. Elsewhere, Citi have conviction in further, albeit limited, near-term downside for nickel prices amid both micro and macro headwinds, with the desk now seeing nickel prices sliding to USD 18,000/t by the end of 2023 (vs current price of USD 18,900/t).

04 Oct 2023 - 10:23- MetalsEU Research- Source: Newsquawk