EUROPEAN COMMODITIES UPDATE: Crude awaits OPEC+ while metals trade mixed

WTI/Brent: +0.4%/+0.4%

• Holding a modest upward bias after selling off in the US afternoon on Wednesday, which was later attributed to a bank offloading a large volume of US oil futures contracts ahead of today's OPEC+ meeting.


• Expectations for OPEC+ have been guided to an extension of the latest round of oil output cuts until Q1 2025, according to Reuters and WSJ sources.


• Recent reports via Energy Intel suggested OPEC+ might look to extend the timeline of the planned unwinding which means that the unwinding would end in 2026 (vs current unwind period is between Jan 2025 - Dec 2025) - i.e. barrels will be returning to markets later than previously thought.


• Elsewhere, demand side of the equation could be somewhat dampened after China watered down expectations for a pursuit of growth in the run up to the Central Economic Work Conference.


• On geopolitics, US President-elect Trump's Middle East envoy met the Qatari and Israeli PMs in a push to reach a Gaza ceasefire deal before inauguration, while Qatar has resumed its role as a key Gaza mediator and the Hamas negotiating team is expected to return to Doha to facilitate talks. It was separately reported that Trump's adviser cited by Axios said Trump wants to implement a Gaza ceasefire deal ASAP without delay and before January 20th.

Spot Gold: -0.1%

• Precious metals trade with a softer bias despite the weaker Dollar with traders cautious as they look ahead to the US jobs report tomorrow ahead of the US CPI data due next week.


• ANZ in a note suggested "After outperforming this year, gold prices are likely to take a breather in the short term", the desk added that "Recent dollar strength is likely to continue, and this will be another headwind for gold demand".


• Spot gold sits in tight range between USD 2,643.87-2,655.63/oz range and within yesterday's parameters (USD 2,632.46-2,657.23/oz).


• On silver, ANZ noted "Silver prices will struggle to move higher amid consolidating gold prices in the short-term."

3M LME Copper: +0.5%

• Copper trades higher this morning with prices supported by the softer Dollar intraday coupled with the positive risk bias in Europe. Traders look ahead to next week's Central Economic Work Conference which was hoped to provide fiscal stimulus, although Chinese press played this down in overnight reports.


• To recap, Chinese state media warned against blindly pursuing faster growth and signalled more focus on supporting consumption in a flurry of articles ahead of the Central Economic Work Conference, according to Bloomberg.


• Furthermore, traders are also cognizant of the potential for a trade war between China and the incoming US administration.


• Elsewhere, Dalian iron ore prices ended daytime trade lower by 1.2% after China watered down expectations for a pursuit of growth in the run up to the Central Economic Work Conference.

05 Dec 2024 - 10:20- MetalsData- Source: Newsquawk