EUROPEAN COMMODITIES UPDATE: Commodities trade subdued across the board amid a firmer Dollar as the complex eyes the next catalyst

Analysis details (10:25)

• WTI and Brent futures are subdued as risk sentiment remains on the backfoot whilst the Dollar is underpinned. The contracts both settled lower by almost USD 2/bbl apiece after falling foul to the Dollar strength and broad risk-off sentiment after Fitch downgraded the US credit rating despite the record EIA crude draw. Crude stocks drew 17mln against an expected draw of 1.55mln (prev. -0.6mln) following in the footsteps of the private inventory data on Tuesday night. WTI Sep resides just above USD 79/bbl (USD 78.69-79.96/bbl range) and Brent Oct trades just under 83/bbl (in a USD 82.36-83.68/bbl range). As a reminder, the OPEC+ JMMC with convene tomorrow to assess market developments. Participants expect the current pact (which does not include the voluntary cuts) to be unchanged, whilst eyes remain on whether Saudi will opt to roll over its 1mln BPD voluntary cuts or unwind offline production by 250-500k BPD. Newsflow for the has been fairly sparse at the start of August – other risk events to focus on for the rest of the week from a sentiment perspective include the BoE (Thu) US ISM Services (Thu), Apple and Amazon earnings (Thu) and US jobs report (Fri).


• Over to metals, spot gold remains heavy amid the recent gains in the Dollar, with the yellow metal extending losses under USD 1,950/oz following yesterday’s fall below the psychological level. In terms of levels to the downside – the 11th July low is at USD 1,924.09/oz, the 10th July low at USD 1,912.45/oz, and the 7th July low at USD 1,909.31/oz. Base metals are subdued but not to a great extent following the recent selloff in the complex, with the downside possibly cushioned by the rosier Chinese Caixin Services PMI overnight – 3M LME copper meanders around USD 8,500/t in a USD 8,464.50-8,538.50/t intraday range at the time of writing.

03 Aug 2023 - 10:27- MetalsEU Research- Source: Newsquawk