EUROPEAN COMMODITIES UPDATE: Crude and gold consolidate, but base metals post losses amid pre-FOMC caution and a downbeat Chinese PMI

Analysis details (10:23)

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  WTI March and Brent April futures are trading sideways as the complex consolidates following yesterday’s sentiment-driven rally, with both contracts settling higher by almost USD 1/bbl apiece. Prices yesterday were unfazed by a much larger-than-expected build in the Private Inventory data, which saw a headline crude +6.3mln (exp +0.4mln). In terms of crude-specific events, the OPEC+ JMMC has been pushed back one hour to 13:00GMT/08:00EST, according to Energy Intel. The JMMC will meet to take stock of energy market fundamentals, this will not be a decision-making meeting – with the next OPEC+ Ministerial Meeting currently slated for 4th June 2023. Sources via Bloomberg and Reuters suggested the wait-and-see approach expected by the JMMC is amid a tentative recovery in global demand. The recovery optimism arises from a combination of mounting calls for less-severe-than-expected recessions/GDP slowdowns, coupled with China abandoning its zero-COVID policy and reopening its markets. Price action today, all things equal, will likely be a function of sentiment as the clock ticks down to the FOMC.


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  Nat Gas futures post modest gains intraday, with US CME Henry Hub Natural Gas trimming recent losses, whilst Dutch TTF futures reverse their earlier downside with some citing colder weather ahead, whilst the E.on CEO also warned that Europe cannot rely on another warm winter, households have not saved enough gas, and the 2023/24 winter season is uncertain with regards to gas supply.


• Over to metals, spot gold is on standby around USD 1,925/oz while holding onto a bulk of yesterday’s gains after the yellow metal briefly dipped towards the USD 1,900/oz mark which coincided with its 21 DMA yesterday – the 21 DMA today sits at USD 1,906.15/oz. Base metals are softer across the board with little help from the cautious mood and the Chinese Caixin PMI which fell short of forecasts – 3M LME copper trades back under USD 9,200/t.

01 Feb 2023 - 10:25- Research Sheet- Source: Newsquawk