EUROPEAN COMMODITIES UPDATE: Crude benchmarks track risk amid China-COVID while Nord Stream 1 maintenance commences
Analysis details (10:25)
Crude benchmarks have been tracking broader risk performance. As such, WTI and Brent dropped to lows of USD 101.68/bbl and 104.08/bbl in tandem with a dip in sentiment after the European cash equity open, but have subsequently been lifted by around USD 1.50/bbl each from recent troughs, in-fitting with the pickup in broader risk sentiment. News flow has been limited and is focused on familiar themes; namely, COVID and Nord Stream 1. Firstly, on the demand-side, China’s COVID situation remains tense with fresh cases being reported including the first detection of the BA.5 variant, updates which have prompted additional testing round and a subsequent press conference for Shanghai, which has seen additional areas deemed to be “high risk”. Secondly, on the supply side, Nord Stream 1 has commenced its scheduled 10-day maintenance period and officials are already expressing concern that supply might not return. As such, natgas prices have been bid throughout the session. Moving to metals, spot gold is relatively contained and unphased thus far by the DXY’s incremental advances given it remains shy of Friday’s best, though a breach of this could perhaps open pressure in the yellow metal – given the price action and correlation seen in recent days. Elsewhere, base metals are impaired given the China read across and copper is also cognizant of Las Bambas returning to full output.
11 Jul 2022 - 10:25- MetalsResearch Sheet- Source: Newsquawk
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