EUROPEAN COMMODITIES UPDATE: Crude continues to gain while base metals falter on a recovering dollar and dismal Chinese PMI

Crude Oil: WTI Jul +0.8%, Brent Aug 0.6%

• A firmer session in a continuation of Monday's gains, facilitated by yesterday's weak dollar, the weekend OPEC+ meeting of the eight members, coupled with no progress in Iran-US talks and Russia-Ukraine discussions.


• Back to OPEC+, Kpler's Bakr suggested "During the OPEC-plus meeting on Saturday with the 8 member states, there were no discussions at all about a higher hike than the 411kbd, according to delegates attending the meeting...Russia did propose a pause, which was also supported by Oman, but the quick consensus was reached to go ahead with the 411kbpd addition in July"


• Desks also suggest that ongoing wildfires in Alberta (Canada) are offering some short-term support for the market.


• Analysts at ING suggest, "The spot oil market is still relatively tight. Demand is set to pick up as we move into the summer months, suggesting prices are likely to remain relatively well supported. However, the market is likely to shift into a large surplus from the fourth quarter onwards. This should put renewed downward pressure on oil prices later in the year."The upside is somewhat capped by the dismal Chinese Caixin Manufacturing PMIs (48.3 vs. Exp. 50.6; Prev. 50.4).


• WTI Jul and Brent Aug have ventured to highs of USD 63.25/bbl (vs low USD 62.66/bbl) and USD 65.34/bbl (vs low USD 64.68/bbl) respectively.


• Ahead, traders look ahead to the weekly Private Inventory report as the next complex-specific scheduled release.

Precious Metals: Gold -0.5%, Silver -1.5%, Palladium -0.1%

• Softer across the board and giving back some of yesterday's gains as the dollar attempts to recoup some ground, and amidst a lack of fresh pertinent catalysts in the European morning thus far.


• Hardly any move was seen on the softer-than-expected EZ Flash CPI metrics.


• Spot gold briefly topped yesterday's high before waning to trade in a current USD 3,351.11-3,392.30/oz range, with the next upside level the 8th May high at USD 3,414.79/oz and the next downside level yesterday's low at USD 3,299.95/oz.

Base Metals: 3M LME Copper -0.4%

• Softer across the board following the dismal Chinese Caixin Manufacturing PMIs (48.3 vs. Exp. 50.6; Prev. 50.4), whilst broader market sentiment is also subdued.


• Furthermore, on the trade front, the White House Press Secretary said US President Trump and Chinese President Xi will likely talk this week, although a Chinese Foreign Ministry spokesperson said there is no information to share on a call between US President Trump and Chinese President Xi.


• 3M LME copper currently sits in a USD 9,521.55-9,610.90/t parameter.

03 Jun 2025 - 10:15- ForexEU Research- Source: Newsquawk