EUROPEAN COMMODITIES UPDATE: Crude consolidates as EU leaders meet, whilst metal markets await the next catalyst

Analysis details (10:58)

WTI and Brent June futures have been moving horizontally since yesterday's settlement, which saw the former settle higher by over USD 3/bbl and the latter higher by around USD 2.6/bbl, whilst prices overlooked the larger-than-expected build in Private Inventories. The main themes remain - China's COVID situation on the demand side and Russian energy dependence on the supply side. On the former, the crude complex saw some downticks heading into Beijing's COVID presser, although quickly recovered as no significant restrictions were announced, albeit yesterday China's Global Times highlighted that "various Chinese cities have issued travel notices encouraging people to avoid travelling during the Labor Day holiday." Over to Russia, yesterday's reports of the halt in Russian gas flows to Poland and Bulgaria have kept the complex underpinned. Gas prices for winter delivery have also surged, with the Dutch wholesale contract for winter +8.3% at EUR 104/MWh. European leaders will be meeting today to map out a response, according to the European Commission President. On this note, some have floated the possibility of a potential Russian oil embargo proposal today – Germany yesterday suggested that Berlin could handle an embargo on Russian oil imports. Elsewhere, spot gold saw some selling pressure in which the yellow metal fell below the 25th April low (USD 1,891.20/oz) and tripped stops below USD 1,890/oz to a low of US 1,887/oz before recovering back towards USD 1,900/oz. Base metals markets are relatively mixed, with nothing interesting standing out.

27 Apr 2022 - 10:57- EnergyResearch Sheet- Source: Newsquawk