EUROPEAN COMMODITIES UPDATE: Crude climbs alongside gold, but Chinese base metals experience subdued trade

Analysis details (10:48)

Upside momentum has been exacerbated in recent trade after the complex gradually drifted higher overnight, although news flow for the crude market was light. On the geopolitical front, EU members are said to be close to an agreement on a new package of sanctions against Russia, but the oil embargo is experiencing some obstacles, namely from Hungary. As the new EU proposal exempts Hungary and Slovakia through 2024 – however, PM Orban has called for a minimum reprieve of five years. On the COVID front, China is said to carry out further mass testing whilst sticking to its zero-COVID policy, although officials have been framing the situation as improving. Elsewhere, the Iranian nuclear deal seems further away from being finalised as the recent oil price rise has reportedly left Iran in no rush to revive the 2015 nuclear deal, according to officials familiar with Tehran's thinking cited by Reuters. Further, yesterday it was reported that the US is looking to replenish a third of its 180mln barrels released. Brent July hovers around USD 113/bbl (vs low 109.87/bbl). Over to metals, spot gold has been moving higher in recent trade in what is seemingly a technical move alongside the softer risk tone following overnight choppiness as the metal tested its 100 DMA (around 1,883/oz). Overnight, Dalian iron ore futures continued to decline with traders pointing to demand woes from China.

06 May 2022 - 10:48- MetalsGeopolitical- Source: Newsquawk