EUROPEAN COMMODITIES UPDATE: Crude climbs, but the Buck subdues metals

Analysis details (11:01)

WTI and Brent July futures are firmer intraday – with the former back above 111/bbl (low 110.14/bbl) and the latter on a 115-handle (low 113.88/bbl). Prices overnight were supported by the constructive APAC risk tone alongside the overall supportive Private Inventory report despite the modest surprise build in headline crude as products saw draws, particularly in gasoline which printed at -4.2mln (exp -0.7mln) – with ING highlighting "The tightening in the US gasoline market will raise concerns over supply as we move into driving season. Tightness in the US is pulling in gasoline from elsewhere, including Europe, which is also looking increasingly tight." Elsewhere, OPEC+ gears up to meet next week – with no change to their pact expected, but the market is increasingly wary about spare capacity; reports earlier this month suggested "OPEC+ production and quotas rose to a record-high 2.59mln BPD as 13 out of the 19 countries with quotas struggled to hit their output targets," according to a survey cited by S&P Global. Meanwhile, the EU's Russian oil embargo remains at a roadblock and reports suggested this portion of the sixth Russian sanctions package would be deferred to a later date. Over to metals, spot gold is pressured by the recovery in the Dollar but found some support at its 21 DMA (around 1,854.50/oz). Base metals are pressured by the turn in the risk tone this morning – with LME copper losing further ground under USD 9,500/t in recent trade. 

25 May 2022 - 11:01- MetalsGeopolitical- Source: Newsquawk