EUROPEAN COMMODITIES UPDATE: Commodities weighed on by the Buck, but nickel bucks the trend

Analysis details (10:38)

WTI and Brent futures have oscillated around the unchanged mark with the complex initially under pressure from the overall risk aversion across the market, whilst China’s COVID situation remains a grey cloud over the demand side of the equation. “Lingering demand concerns over China have hit sentiment, whilst recent weakness in refinery margins is certainly not helping”, say the analysts at ING, but given the recent volatility, “the potential for OPEC+ intervention means that the floor for the market is not too far below current levels”, the Dutch Bank says. Elsewhere, the second day of the Shanghai Cooperation Organisation (SCO) summit is underway with initial commentary from Russian President Putin and Chinese President Xi failing to offer much in the way of new information. Today, the Russian Presiden is due to hold bilateral meetings with the Turkish, Indian, and Azerbaijani heads, whilst Iran also reportedly signed eight new memoranda of understanding with Uzbekistan in a bid to circumvent US sanctions – deals in the oil and gas sectors. In terms of other news for the complex, the Kazakh energy ministry expects to stick to its oil production plans of 85.5mln tonnes this year and said its Kashagan oilfield will resume output "in October at best", which follows a report that the country may review its 2022 oil output plans amid the outage in Kashagan. WTI October resides around USD 85/bbl after finding resistance at its 10DMA (85.97/bbl) whilst Brent November trades around USD 91/bbl after failing to top USD 92/bbl in early European hours. Elsewhere, spot gold is flat after the yellow metal took out the 2021 low (USD 1,676/oz) yesterday with clean air seen below until the COVID low of USD 1,450/oz, aside from psychological figures. Base metals meanwhile are softer across the board as the Dollar remains firm, but LME nickel bucks the trend with reports via Bloomberg also suggesting LME is being sued by hedge funds, including AQR, in the London High Court – following the nickel debacle. 

16 Sep 2022 - 10:37- Research Sheet- Source: Newsquawk