EUROPEAN COMMODITIES UPDATE: Crude and gold tread water awaiting geopolitical updates while base metals slip on sentiment and the Dollar

Analysis details (09:44)

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  WTI and Brent December futures are flat intraday with price action choppy within tight ranges as participants observe the geopolitical updates emanating from the Middle East for signs of expansion. The latest reports via Arabic news outlets suggest Israel and South Lebanon are exchanging fire, whilst an Israeli Military spokesman stated the nation is preparing for the next stage of the war and everyone is talking about the ground operation, but it could be "something else", and added there is no humanitarian ceasefire in Gaza at this stage. Note, that US President Biden is poised to visit Israel tomorrow, some suggest Israel may avoid making a large move during the US President's visit. Meanwhile, Iranian Supreme Leader Khamenei says if Israel's crimes continue then no one can stop resistance forces. Aside from geopolitical updates, participants could be eyeing short-term price action from US retail sales alongside the weekly inventory data. On that note, some desks are keeping an eye on whether the US will opt to refill its SPR to hedge against Middle Eastern risks. WTI resides just above USD 85/bbl (USD 84.75-85.69/bbl range) while its Brent counterpart trades under USD 90/bbl (USD 89.22-90.15/bbl parameter). Sticking with energy, Dutch TTF prices have slipped and now trade around the USD 47/MWh mark after rising to levels near EUR 54/MWh on Friday, with some desks suggesting an unwind of geopolitical risk premium for now. Meanwhile, Chevron Australia spokesperson said they are continuing work to conclude the drafting of proposed enterprise agreements for Gorgon and Wheatstone facilities based on clarification provided by the Fair Work Commission.


• Over to metals, spot gold is flat around the USD 1,920/oz mark and remains choppy within narrow parameters with traders on guard for geopolitical updates in the absence of other macro events, with the yellow metal within yesterday’s USD 1,908.23-32.36/oz range and still some way off Friday’s low at 1,868.83/oz. Base metals are mostly softer as the market mood remains cautious and the Dollar rises towards session highs, with 3M LME copper languishing just above USD 7,900/t having dipped under the level earlier in the session to print a USD 7,895-7,988/t intraday parameter at the time of writing. Elsewhere, mining giant Rio Tinto said China's economy is showing signs of stability while consumer confidence in the US is starting to wane. Rio Tinto also reported quarterly Pilbara iron ore output of 83.5mln tons (prev. 84.3mln tons YY), shipments 83.9mln tons (prev. 82.9mln tons YY), mined copper 169k tons (prev. 138k tons YY), aluminium output 828k tons (prev. 759k tons YY).

17 Oct 2023 - 09:46- MetalsEU Research- Source: Newsquawk