EUROPEAN COMMODITIES UPDATE: Crude continues to decline, XAU hit by the USD while base peers welcome the US tone post-Mag7

WTI/Brent: -1.5%/-1.4%

• Edging lower in a continuation of the slump seen on a Reuters source report on Wednesday that Saudi Officials have reportedly briefed allies and industry experts that the Kingdom can sustain a prolonged period of low oil prices. Adding to the anticipation/concern that OPEC+ could continue to relax its production curbs.


• Prior to this, the market was already bearishly-biased by the day’s stagflationary US data and Saudi Arabia cutting its OSP for Arab Light into Asia by USD 2.30/bbl, the largest reduction since 2022.


• As it stands, the benchmarks are at lows of USD 57.26/bbl and USD 60.15/bbl respectively, on track for their fourth consecutive session of losses after opening the week at USD 63.59/bbl and USD 66.18/bbl respectively.


• Aside from updates to the above Saudi/OPEC situation, the complex of course looks to US data for a macro guide and anything fresh on the geopolitical front where the main developments are digesting the US-Ukraine minerals deal alongside a WSJ report that Senator Graham is moving forward with plans for fresh sanctions on Russia.


• Elsewhere, in the Middle-East, we are attentive to some reports that Israel's Netanyahu held talks with the US on widening operations in southern Lebanon.

Gold: -1.6%

• Pressure as the USD makes further gains with the DXY over 100.00 at best. Additionally, while European action is limited given holidays the US risk tone is strong owing to the performance of Mag7 members Meta & Microsoft after-hours/pre-market.


• Yellow metal has been as low as USD 3.2k/oz, over USD 100/oz from the week’s opening levels despite the series of soft data for the US as the inflationary part of the stagflationary narrative and modest yield curve steepening weighs on XAU.


• Ahead, much the same as outlined in Crude as the complex awaits insight from US data points which will likely dictate the fortunes of the USD and the macro tone generally ahead of more Mag7 earnings tonight and Payrolls on Friday.

Copper: +0.9%

• Contained trade overnight given the mass holiday closures and absence of the metals largest buyer, China, for a long weekend (May 1st-5th).


• This morning, 3M LME Copper has picked up tracking the broader macro tone with US futures strong after earnings, 3M LME Copper back above the USD 9.2k mark.

01 May 2025 - 09:45- ForexGeopolitical- Source: Newsquawk