EUROPEAN COMMODITIES UPDATE: Commodities under pressure as the Dollar picks up

Analysis details (10:50)

WTI and Brent December contracts are softer on the session and gave up earlier gains as the DXY creeps higher throughout the European morning, with the former now around USD 84/bbl (vs 85.53/bbl high) whilst the latter resides just above USD 91/bbl (vs 92.66/bbl high). In terms of the latest newsflow, overnight there were reports that the Biden admin is looking to release another 10-15mln barrels from the Strategic Petroleum Reserve (SPR), which is part of the 180mln barrels release announced earlier in the year. Furthermore, Bloomberg reported that the Biden admin is still weighing limits on exports of fuel to keep more gasoline and diesel inside the US, but Bloomberg suggests this will likely not happen before the midterms. Elsewhere, the Saudi Energy Minister is poised to visit India this week, according to ET citing sources but confirmed by market contacts, with Saudi reportedly seeking to clarify the OPEC+ decision last month with India. Ahead, the EU is poised to unveil its emergency energy measures package at 14:30BST/09:30EDT which could include joint purchasing and an alternative benchmark to Dutch TTF. Over in the metals markets, spot gold is flat around the USD 1,650/oz mark in a USD 10/oz range – but still under its 10 and 21 DMAs at 1,673.56/oz and 1,668.63/oz. Finally, LME metals are mostly lower amid the recent rise of the Dollar, whilst Rio Tinto forecasted annual iron ore shipments at the lower end of guidance and sees further downside risks to demand as the global economy slows – 3M LME copper is under 7,500/t whilst LME aluminium stocks saw another hefty metric north of 48k tonnes.

18 Oct 2022 - 10:50- MetalsResearch Sheet- Source: Newsquawk