EUROPEAN COMMODITIES UPDATE: Crude and metals sell-off but gas prices are boosted by Nord Stream jitters

Analysis details (10:10)

WTI and Brent October contracts have continued trending downwards in a resumption of Friday’s action, with global growth fears and risk aversion taking the wheel this morning – WTI trades under USD 89/bbl (vs USD 89.70/bbl high) while Brent hovers on either side of USD 95/bbl (vs USD 96/bbl high). Traders also await the US response to the EU’s proposal on the Iranian Nuclear Deal, with the Iranian Foreign Ministry spokesman this morning suggesting that they have not yet received a response, but "we are still on the path of negotiations" with regards to the Nuclear Deal, adding that relatively good progress has been made, but nothing is agreed until everything is agreed”. However, the main focus of this morning has been on European gas prices surging on news that Russia’s Gazprom will shut down the Nord Stream 1 pipeline for three days at the end of the month to conduct unscheduled maintenance. ING wrote “the real concern for the market is whether flows will resume after this period. Gazprom has said that once this work is complete, flows will return to 20% of capacity, which would be unchanged from current levels.” Meanwhile, RBC suggests “Given events over recent months, we think the market may disregard Gazprom's comments and start to consider whether the pipeline may not return to service, or at the very least may be delayed for any given reason.” Dutch TTF October surged over 18% whilst European coal for the next year rose over 5% to a new record. On that note, Germany is to prioritise coal trains over passenger services amid its energy crisis, according to Welt am Sonntag. Over to metals, the complex has been dented by the firmer Dollar - spot gold is losing further ground under USD 1750/oz with USD 1,711/oz touted as support (27th Jul low). Base metals are mostly lower with LME copper reversing the PBoC-induced APAC gains as the 3M price eyes USD 8,000/t to the downside.

22 Aug 2022 - 10:10- MetalsResearch Sheet- Source: Newsquawk