EUROPEAN COMMODITIES UPDATE: Crude continues to crumble alongside XAU with base metals rangebound

Analysis details (11:00)

• Crude benchmarks have recently slumped further into the red, in a continuation of the price action that was in play during yesterday’s session. Spot gold has similarly slipped to fresh lows, occurring alongside a fresh bout of USD upside with the DXY at session bests and moving ever closer to 106.00. Finally, base metals are slightly mixed but for the most part have not strayed significantly from relatively contained levels.


• For crude, the complex has been relatively steady throughout European hours at initial lows around the USD 77.00/bbl and USD 81.00/bbl figures for WTI Dec’23 and Brent Jan’24 respectively. However, the contracts then slumped to current session troughs of USD 76.51/bbl and USD 80.87/bbl with fresh fundamentals limited but the move occurring alongside a further bout of USD upside. In terms of the initial pressure, this was very much a continuation of Tuesday’s price action and further exacerbated by the Private Inventory release which saw an unexpected and substantial headline build. As a reminder, the EIA will not be releasing any data this week while they conducted an update and as such the organisation will print two weeks’ worth of data next Wednesday and Thursday for Petroleum and NatGas respectively.


• Most recently, it is worth pointing out that a magnitude 5 earthquake has occurred in western Texas, according to the EMSC. We are yet to see any updates as to what, if any, commodity activity in the region has been affected, but it is worth highlighting that the crude futures lifted slightly from the mentioned session lows on this update.


• Moving to metals, spot gold is pressured on account of continued USD strength that has more than outweighed any traditional haven demand that may have been expected from the tepid risk tone. Action which has taken the yellow metal to a low print of USD 1959/oz, which essentially matches the 21-DMA. Elsewhere, base metals are more mixed in-fitting with APAC trade though overall performance can perhaps best be described as non-committal and range bound thus far.

08 Nov 2023 - 10:55- MetalsResearch Sheet- Source: Newsquawk