EUROPEAN COMMODITIES UPDATE: Crude and gold march higher but base metals see a mixed picture

Analysis details (10:55)

WTI and Brent October futures have been grinding higher since the European entrance following an APAC session of consolidation, with the contracts supported by the much larger-than-expected draw in Private Inventories alongside the recent noise around a potential OPEC+ output cut. To recap, the Saudi Energy Minister on Monday floated the idea to tighten output to stabilise markets, whilst Reuters sources said OPEC+ might lean towards an oil output reduction when and if Iranian production returns. WSJ reported Saudi Arabia and its allies are open to oil-output cuts to keep prices high, and the comments from the Saudi Energy Minister have been backed by some OPEC members. The next OPEC+ meeting is slated for September 5th and could very well be contingent on the Iranian Nuclear talks. On that front, US officials expect to respond to Iran’s comments on a European draft proposal by Wednesday, after which another round of negotiations in Vienna to finalize the details of a potential deal will likely be needed. WTI briefly popped back above USD 95/bbl (vs low 93.34/bbl) while Brent extends its gains above USD 101/bbl (vs low 99.67/bbl). Elsewhere, spot gold has been drifting higher after mounting the USD 1,750/oz mark, with its 10, 21 and 50 DMAs seen at 1,764.80, 1,768.52 and 1,769.39 respectively. Elsewhere, base metals are mixed with 3M LME copper lower but still north of USD 8,000/t, whilst aluminium outperforms, with reports suggesting German aluminium maker Speria is to decide on possible cuts next month with the smelter reportedly considering halving output due to high energy costs, according to Bloomberg.

24 Aug 2022 - 10:55- Research Sheet- Source: Newsquawk