EUROPEAN COMMODITIES UPDATE: Crude climbs with gold torn between risk & the USD while base metals slip

Analysis details (10:45)

• Crude benchmarks are firmer this morning, detaching themselves somewhat from the tepid equity tone (ex-UK) as market focus continues to centre around upcoming US earnings, with a particularly key after-market docket. Elsewhere, nat gas continues to pullback following the resumption of the Nyhamma plant. Finally, metals are contained and caught between the tentative tone and the USD’s Sterling-driven resurgence.


• In crude, the space is bid despite the USD’s strength with focus on updates to a number of refineries and particularly SATORP’s Al Jubail (450k BPD) site which is reportedly to close for 45-days at the end-September, according to Reuters sources. Elsewhere, developments have been thin though geopolitics continues to draw some attention given the escalating action/rhetoric around the Koreas. Currently, WTI and Brent Sep’23 are firmer by around USD 0.30/bbl and at the top-end of circa. USD 1.00/bbl parameters. Ahead, the EIA inventory report is forecast to show a headline draw of 2.44mln, a more sizeable crude drawn than the Private Inventories -0.8mln figure.


• European gas prices continue to pullback, following on from resumption of activity at the Nyhamma plant (80mcm/D). On the complex, Goldman Sachs reiterates its view for winter TTF prices to be skewed “to the upside from current forwards at EUR 48/MWh”, citing the ongoing tightness of LNG balances.


• Moving to metals, spot gold is essentially unchanged and unable to gain traction in either direction as it is torn between the strong USD and the tepid risk tone. Currently, the yellow metal is holding just shy of USD 1980/oz in particularly narrow parameters. Elsewhere, base metals are succumbing to the above factors amid numerous production updates from the likes of Rio Tinto, who cut FY23 refined copper output, and Antofagasta who posted QQ production upside for copper and gold.

19 Jul 2023 - 10:42- MetalsResearch Sheet- Source: Newsquawk