EUROPEAN COMMODITIES UPDATE: Consolidation across commodities following the prior day’s inflation-induced beating

Analysis details (10:38)

WTI and Brent front month futures are relatively contained around USD 87/bbl and USD 93/bbl respectively after the US inflation-induced risk aversion yesterday prompted both contracts to settle lower on the day, whilst a much larger-than-expected build in Private Inventories also capped gains overnight. This morning, the mood across the complex is somewhat tentative. The IEA’s OMR cut its 2022 demand growth forecast by 110k BPD, with demand growth set to halt in Q4 but rising again in 2023. The agency cited a faltering Chinese economy, and a slowdown in OECD countries undercutting demand. On the supply side, IEA flagged more supply from Libya, Saudi Arabia, and the UAE, which was offset by losses in Nigeria, Kazakhstan and Russia. The report also suggested Russian oil exports rose 220k BPD in August to 7.6mln BPD, down 390k BPD vs pre-war levels. Comparing this to the OPEC MOMR yesterday - 2022 world oil demand growth remained unchanged from the last report to 3.1mln BPD - this includes the recently observed trend for additional oil demand growth due to fuel switching in power generation. Elsewhere, spot gold holds onto the USD 1,700/oz mark after dipping to a USD 1,696.10/oz low yesterday, with upside levels including the10, 21, and 50 DMAs at 1,708/oz, 1,726.50/oz, and 1,739.66/oz. Elsewhere, base metals are relatively flat awaiting the next catalyst, whilst 3M LME copper resides around USD 7,850/t from levels above USD 8,000/t yesterday.

14 Sep 2022 - 10:40- Research Sheet- Source: Newsquawk