EUROPEAN COMMODITIES UPDATE: Crude edges higher despite risk aversion and a firmer dollar, with geopolitics in focus after the Xi-Putin-Modi summit

Crude Oil: WTI Oct +2.1% Brent Nov +0.9%

• Firmer and edging higher this morning, totally ignoring headwinds from a firmer dollar and broader risk aversion, with the gap in intraday price changes between WTI and Brent a function of yesterday's lack of settlement amid the US Labor Day holiday.


• Price action this morning has been intriguing, with little in terms of newsflow to explain why crude is moving against the currents. Naturally the influence of geopolitics could explain this, given the lack of Ukraine/Russia progress - in turn keeping chances of secondary sanctions against Russia high. Further, the meetings between Russian President Putin, Chinese President Xi, and Indian PM Modi, have been framed as a united front against the west.


• On that note, it was also reported that European Union countries are looking to ways to plug any remaining loopholes to ensure that Russian gas won’t be furtively mixed into the bloc’s supplies once a ban takes effect by the end of 2027, according to Bloomberg News.


• Elsewhere, "The Israeli prime minister is holding a meeting to discuss the possibility of full control of the West Bank and measures against the Palestinian Authority", according to Iran International citing i24. The Israeli discussions on assuming full control of the West Bank and weakening the Palestinian Authority signal a potential break from the Oslo framework, raising the prospect of annexation and ending PA-administered governance.


• Meanwhile, traders gear up for the OPEC-8 meeting this weekend, in which analysts expected output to remain stable: "We do not see space for OPEC+ to unwind further cuts in 2026 given an already oversupplied market,” said analysts at HSBC.


• WTI currently resides in a 63.66-65.35/bbl range while Brent sits in a USD 68.15-68.83/bbl range.

Precious Metals: Gold +0.1%, Silver -0.7%, Palladium -1.5%

• Mixed fortunes for precious metals but with outperformance in gold vs peers. Spot silver pulls back after yesterday's outperformance, whilst palladium succumbs to broader risk aversion.


• Spot gold eked a fresh record high at USD 3,508.79/oz before pulling back towards lows on USD strength, albeit losses remain cushioned.


• Spot gold resides in a USD 3,470.05-3,508.79/oz range at the time of writing.

Base Metals: 3M LME Copper -0.2%

• Mostly lower trade across base metals amid the firmar dollar and broader risk aversion across the complex.


• 3M LME copper resides in a USD 9,850.00-9,944.85/t.


• Iron ore however ticked higher overnight on hopes of demand recovery following China's military parade, which saw production controls in place for the steel hub city of Tangshan in a bid to ensure better air quality for the event.

02 Sep 2025 - 10:20- MetalsGeopolitical- Source: Newsquawk