EUROPEAN COMMODITIES UPDATE: Crude attempts a recovery but base metals continue to feel the pain

Analysis details (09:41)

WTI and Brent front-month futures remain choppy within tight ranges after the complex slumped yesterday, with losses attributed to the bleaker demand outlook arising from growing recession fears – with Brent settling lower by over 9% and WTI settling under USD 100/bbl. That being said, the overall fundamental picture has not changed. The oil market is still poised to remain tight, OPEC spare capacity is in question, and Russian fuel remains shunned by the West. Participants predicted earlier this year that the crude complex will likely get hit by recession woes but this may present a buying opportunity in the longer term, whilst Goldman Sachs said oil has overshot as the global deficit is unresolved and it is premature for oil to drop on recession concerns. Meanwhile, Norway’s oil strike union leader announced an end to the strike with oil and gas workers to return to work as soon as possible following the government imposing a forced settlement, according to Reuters. WTI Aug trades around USD 101/bbl while Brent Sep trades on either side of USD 105/bbl. Elsewhere, spot gold is lacklustre after slumping beneath USD 1800/oz yesterday and trading closer to USD 1,750/oz since the overnight session. Base metals extend on their downside amid global growth concerns – with LME copper briefly dipping under USD 7,500/t whilst Shanghai copper and tin posting losses exceeding 7%, nickel down 5% at the time of writing.

06 Jul 2022 - 09:41- MetalsResearch Sheet- Source: Newsquawk