EUROPEAN COMMODITIES UPDATE: Crude boosted by OPEC sources, but metals experience mixed trade with China away

Analysis details (10:05)

WTI and Brent futures gapped higher at the open amid reports over the weekend that OPEC+ could opt for target cuts deeper than 1mln BPD, whilst Saudi may also decide on an additional voluntary cut. Energy Intel said talks among delegates thus far indicate a cut of 1.5mln or more under consideration, although it is unclear if this will be in phases. “Saudi Arabia is keen to lower output both to prop up prices and so it can keep some production capacity in reserve. The Kingdom fears that Russian output could fall sharply later this year when western sanctions against its oil exports tighten”, according to FT citing people brief on Saudi’s thinking. All in all, OPEC+ is likely to agree on output cuts, with expectations ranging from 0.5-1.5mln BPD, as per several source reports, with the latest pointing at reductions towards the top end of the range, although it is worth being aware of one OPEC source cited by Reuters on Saturday who suggested the likely figure would be closer to 500k BPD. Talks are expected to continue ahead of the meeting with further sources likely to be released ahead of the confab this Wednesday. In terms of the schedule, OPEC+ will be meeting in person in Vienna for the first time since March 2020. The Joint Ministerial Monitoring Committee (JMMC) will review the findings of the JTC and make a recommendation to the decision-making OPEC+ group. The JMMC is set to meet at 12:00BST/07:00EDT, with the OPEC+ ministerial meeting slated for around 12:30BST/07:30EDT. WTI November is back on a USD 83.00/bbl handle (vs low 80.87/bbl) whilst Brent December inches closer toward USD 89.00/bbl (vs low 86.35/bbl).  Elsewhere, spot gold is flat around Friday’s range but still above the USD 1,650/oz and in between its USD 21 DMA (1,677/bbl) and 10 DMA (1,654/oz). Finally, LME metals are relatively mixed with 3M copper back under USD 7,500/t amid the downbeat risk tone and the absence of China due to the Golden Week holiday.

03 Oct 2022 - 10:09- MetalsResearch Sheet- Source: Newsquawk