EUROPEAN COMMODITIES UPDATE: Crude and copper boosted by China COVID sources

Analysis details (10:35)

WTI and Brent December contracts are firmer intraday with the former around USD 86/bbl (84.49-86.27 range) whilst the latter resides around USD 93.50/bbl (91.95-93.92 range). The crude complex is buoyed by the pullback in the Dollar after receiving a boost from source reports that China is considering easing its COVID rules for travellers - "Bureaucrats are looking at cutting the quarantine period to two days in a hotel and then five days at home... Currently, China requires 10 days of isolation on entry into the country, with seven days confined to a hotel room, and then another three days at home..", according to Bloomberg. Although the update falls short of the abandonment of China’s zero-COVID policy, the crude complex welcomed the easing of rules given the hindrance to demand emanating from China. Elsewhere, EU energy ministers are gathering today to focus on the energy situation in the continent, with ministers expected to discuss the package of proposals presented by the European Commission on October 18th. An EU-wide cap on gas imports is also expected to be discussed, although 15 countries currently oppose it as it could divert LNG away from Europe to global competitors that are willing to pay more. In terms of metals, spot gold sees some support from the DXY remaining under 113.00, although remains well off recent highs, with the yellow metal still around the USD 1,630/oz mark (vs yesterday’s 1,654.50/oz high). LME metals are mixed but 3M copper receives a boost from the Buck alongside the aforementioned China source reports, but the red metal remains under USD 7,500/t. 

20 Oct 2022 - 10:35- Research Sheet- Source: Newsquawk