EUROPEAN COMMODITIES UPDATE: Crude consolidates near WTD troughs after reserve release pressure

Analysis details (10:20)

WTI and Brent are continuing their APAC consolidation after yesterday’s pressure amid further crude reserve releases. Currently, the benchmarks lie towards the mid-point of the session’s range and as such off the overnight/WTD trough of USD 95.43/bbl and USD 100.13/bbl for WTI and Brent respectively. Newsflow has been somewhat limited but includes further details around the second IEA release with Japan set to contribute some 15mln/bbl; while the details are interesting, they do not fundamentally alter the narrative. More pertinently, China’s Shanghai City is reportedly to cap load factor on international flights by foreign airlines at 40% (prev. 75%), according to Reuters sources; adding to the demand-side bearish factors for crude amid the region’s surge in COVID cases and recent associated lockdown extensions. Elsewhere, Ukraine-Russia updates have been thin in terms of negotiation developments between the two sides, but, we Russia has destroyed four fuel storage facilities within Ukraine while reports via Spiegel citing intercepted transmissions indicate alleged Bucha war crimes were not random acts. Technically, Futures Tech points out that a noted trend line has broken and hence further downside may be seen, highlighting a potential retest of USD 93.76/bbl in Brent. Moving to metals, spot gold/silver are little changed overall and the yellow metal is capped by USD 1930/oz, a mark that also served to limit upside action at this point in time on Wednesday. Elsewhere, LME Copper is pressured in a continuation of APAC trade and failing to derive any impetus from the choppy, but ultimately marginally positive, equity performance at present.

07 Apr 2022 - 10:20- MetalsResearch Sheet- Source: Newsquawk