EUROPEAN COMMODITIES UPDATE: Crude continues to advance while metals are mixed with the LME shut

Analysis details (10:40)

• Crude benchmarks are firmer on the session, in a continuation of the attempted recovery which began towards the latter half of last week and despite the broader tentative tone. Once again, crude-specific newsflow has been limited with broader markets focused on the upcoming Central Bank-related docket (ECB/Fed speak and numerous US surveys) alongside any fresh insight into demand concerns.


• On the latter point, Goldman Sachs argues that such fears around US bank stress, China’s industrial weakness and declining margins around diesel have been the drivers behind the complex’s recent downside. While supply-side updates, such as around Russia and OPEC compliance, are regarded as overblown. Nonetheless, the desk maintains their Brent December’23 and April’24 forecasts of USD 95/bbl and USD 100/bbl respectively, citing expected large deficits in H2.


• Back to current price action where the crude benchmarks are posting gains of over USD 1/bbl at USD 72.70/bbl and USD 76.50/bbl for WTI Jun and May Jul respectively. As mentioned, specific updates have been limited but on the growth narrative, the latest EZ Sentix is noteworthy within which the expectations measure dropped to its lowest since December’22 with “the negative signs” dominating on the international and US components as well.


• Turning to metals, spot gold is essentially unchanged on the session with sub-10/oz parameters and still comfortably above the USD 2k/oz mark. Again, specific fundamentals have been limited ahead of the afternoon agenda but the above growth commentary remains notable. More broadly, the Barrick Gold CEO Bristow in an FT interview said the Co. expects gold and copper prices to increase, to the benefit of mining stocks. Currently, base metals are modestly firmer on the session as the USD pulls back towards a 101.00 base in thin trade owing to the absence of LME participants given the UK Bank Holiday.

08 May 2023 - 10:34- Research Sheet- Source: Newsquawk