EUROPEAN COMMODITIES UPDATE: Crude continues to consolidate & metals mixed pre-Powell

Analysis details (10:45)

• Crude continues to pick up after breaking the mini-trend of three consecutive sessions of declines, and the broader pullback from the circa. USD 75.00/bbl region in WTI Jul’23 from June 5th. Yesterday’s upside was spurred by action out of China and crude-specific remarks from Goldman Sachs’ Currie on CNBC, after the bank cut its crude forecasts in a weekend note. Today, specific newsflow has been slim pre-FOMC and as such the upside is seemingly a continuation of the above move.


• Currently, WTI Jul’23 and Brent Aug’23 are inching above the USD 70.00/bbl and USD 75.00/bbl handles respectively, action which places them above Tuesday’s best but some way shy of recent peaks.


• This morning, the IEA released its monthly market report following OPEC’s equivalent yesterday, the IEA forecasts oil demand rising to a record 102.3mln BPD (+2.4mln) for 2023, broadly chiming with the OPEC report’s 2.3mln BPD increase. Both reports gave extensive mention to the bearish factors that have been impacting but offset this by upticks in crude use in key consumers; on this, the OPEC release explicitly mentioned China, Latin America and the Middle East.


• Moving to metals, spot gold is incrementally firmer and at the top-end of the sessions range which is yet to see it gain any real traction above the USD 1950/oz mark as the broader risk tone remains robust and serves to offset any USD-driven upside.


• Base metals are somewhat mixed, though this is seemingly more a function of yesterday’s pronounced gains for the complex on the aforementioned China stimulus action and reports rather than a fresh fundamental headwind for the complex. Currently, LME Copper has pulled back below the USD 8.5k mark but remains at the top end of recent parameters and by extension holds onto the bulk of the week’s upside thus far.

14 Jun 2023 - 10:40- MetalsResearch Sheet- Source: Newsquawk