EUROPEAN COMMODITIES UPDATE: Commodities tread water in search of catalysts heading into month-end while oil eyes OPEC

Analysis details (09:38)

• WTI and Brent front month futures are trading within narrow ranges in the absence of any major catalysts, with the complex boosted by the recent weaker Dollar, and as the clock ticks down to the OPEC+ confab, which is slated to take place tomorrow. Although sources yesterday flagged the possibility of another delay; however, reports this morning note that the meeting is currently expected to continue as scheduled on Thursday. OPEC headlines will likely continue to be released throughout today and tomorrow as deliberations continue and delegates attempt to massage market expectations ahead of the confab.


• Moving to geopolitics, Palestinian press reported that Israeli boats fired towards the coast of Khan Yunis, the beach and Sheikh Radwan “in a new violation of the Gaza truce”, whilst sources via AFP close to Hamas said the group is willing to extend the truce by four more days. Furthermore, desks are flagging supply disruptions emanating from Kazakhstan amid the Black Sea storms, with output from the largest oil fields (Tengiz, Kashagan and Karachaganak) slashed by 56% - the weather is expected to continue throughout the week. Stateside, the weekly private inventories did little to spur much price action at the time [Crude -0.8mln (exp. -0.9mln), Gasoline -0.9mln (exp. +0.2mln), Distillate +2.8mln (exp. +0.4mln), Cushing -0.5mln], with traders now awaiting confirmation from the weekly DoE metrics. 


• As it stands, WTI Jan trades on either side of USD 76.50/bbl (USD 76.36-98/bbl range) while Brent Feb trades on either side of 81.50/bbl (USD 81.29-92/bbl ranges).


• Over to metals, spot gold holds onto recent gains fuelled by the softer Dollar and dovish-leaning Fed commentary, with spot gold briefly topping USD 2,050/oz overnight to levels last seen in May, with the next upside level likely at 2,053/oz – the 5th May peak. Similarly, spot silver briefly rose above USD 25/oz vs its November low of USD 21.88/oz. Base metals are flat/mixed and take a breather from yesterday’s Dollar-induced gains, with 3M LME copper mounting the USD 8,500/t mark before dipping back under the level. On the copper front, eyes are on MMG’s Las Bambas mine (max production capacity of 400k tonnes p.a.) in Peru which began an indefinite strike yesterday. Since, there have been reports that the strike at the copper mine is limited to 48 hours after the labour authority declared the protest inappropriate. Overnight, Dalian iron ore futures declined for a fifth consecutive session with markets continuing to respond to Chinese intervention.

29 Nov 2023 - 09:38- Research Sheet- Source: Newswires