EUROPEAN COMMODITIES UPDATE: Crude curtailed in-fitting with broader price action

Analysis details (10:50)

Currently, the benchmarks reside within ranges of USD 118.00-120.26/bbl and USD 119.35-121.94/bbl for WTI Jul’22 and Brent Aug’22. Throughout the European morning newsflow has been limited but pertinent with China’s COVID situation, following the latest cluster of cases in the capital, of particular concern for the demand side of the equation. Separately, on the geopolitical front, the US and Taiwan are reportedly finishing preparation for bilateral discussions in the US which are expected before month-end; discussions which, judging by recent rhetoric, are unlikely to be well received within China. As it stands, WTI and Brent are lower to the tune of USD 1.00bbl, amid broader selling pressure following the above updates coupled with the ongoing fallout from and implication of Friday’s hot US CPI. However, the benchmarks have lifted notably from initial lows that reside above the USD 119/bbl handle for Brent Aug’22 and touted pertinent support levels between USD 118.50-55/bbl below this. In terms of the session ahead, price action is likely to remain dominated by broader macro themes around China, inflation, central banks and geopolitics; on the latter, we are awaiting fresh updates from Iran/IAEA on the formers removal of cameras at nuclear sites and Director Grossi’s warning that a three/four week outage could end a potential nuclear deal. Moving to metals, spot gold is pressured by circa. USD 15/oz amid a stronger USD and pronounced yield action; however, the yellow metal is yet to drop below USD 1850/oz and the 10-, 21- & 200-DMAs at USD 1852, 1847 & 1842 respectively. Elsewhere, Ferrexpo, which is the third largest iron ore pellet exporter globally and is based out of Ukraine, updates that they are to lower production for a period of time due to infrastructure damage from a Russian missile strike.

13 Jun 2022 - 10:50- MetalsResearch Sheet- Source: Newsquawk