EUROPEAN COMMODITIES UPDATE: Crude gets clipped ahead of OPEC’s JTC and a Blinken/Lavrov call

Analysis details (10:45)

WTI and Brent commenced the session on the front-foot, though upside has waned throughout the morning in-spite of macro developments being slim and familiar themes very much in focus. Currently, the benchmarks are lower to the tune of USD 0.80/bbl and Brent has moved within reach of Monday’s USD 88.09/bbl trough, though its WTI counterpart remains around USD 0.50/bbl from its equivalent at USD 86.34/bbl. Newsflow is, and will likely remain, focused on two factors; namely, geopolitics and OPEC+. On geopolitics, the main overnight update was that the US had received Russia’s written response to their security proposals; however, the Deputy Russian Foreign Minister has since denied this with the response in question reportedly regarding a separate issue. Unsurprisingly, officials have reiterated that Russia will respond when they deem it to be appropriate, but its is worth recalling that Foreign Minister Lavrov has intimated we should not expect a response this week. For the session ahead, Lavrov and US Secretary of Blinken are due to speak in the US morning, though details on this are light. Turning to the second factor, OPEC’s Joint Technical Committee (JTC) is due to meet today ahead of Wednesday’s OPEC+ gathering. The group is expected to continue with its plans to ease supply curbs by 400k BPD, though the likes of Goldman Sachs see an increasing chance for a faster easing given recent benchmark upside and likely pressured from importing nations in light of this. Moving to metals, spot gold and silver are firmer, the yellow metal holds above the USD 1800/oz mark in a recovery from pressure towards the end of last week. As such, gold is back in proximity to a cluster of DMAs, including the 200-. 50- & 100-DMAs at USD 1805/oz, 1801/oz and 1795/oz respectively. LME copper is supported but around familiar levels after a relatively rangebound APAC session as participants are away for the New Year holiday.

01 Feb 2022 - 10:45- MetalsResearch Sheet- Source: Newsquawk