EUROPEAN COMMODITIES UPDATE: Crude in the red, XAU dented while base metals post caution gains. Gas outperforms.

WTI/Brent: -0.9%/-0.7%

• Softer, despite the relatively robust risk tone and pressure in the USD.


• Downside which emerged following overnight reports that Israel and Lebanon are close to an agreement which a source hopes will be announced within a couple of days. Since, updates on the geopolitical front have been somewhat limited.


• Benchmarks also noting and reacting to Treasury nominee Bessent’s aim of lifting US oil production by 3mln BPD.


• More recently, benchmarks have been lifting off worst in the European morning, as the broader risk tone remains constructive and welcomes the appointment of Bessent to Treasury Secretary (see Fixed Income piece for more). However, a bout of downside re-emerged on the Iranian oil minister said they will strive not to accept limits on the oil production quota - further details from his remarks are light thus far.


• Holding at the mid-point of a circa. USD 1/bbl band for both WTI and Brent, parameters which are well within recent ranges.

Nat Gas: +6.1%

• Outperforming, taking impetus from the risk tone alongside gas-specific updates.


• Namely, Iraq announced a 15-day halt to Iranian gas due to maintenance, a halt which is cutting 5.5GW worth from the grid.


• Elsewhere, while nominations for flows into/from Slovakia involving Ukraine were at normal levels over the weekend, Monday’s update for flows from Slovenia into the Czech Republic were down 5% W/W.

Gold: -1.5%

• Notably softer. Pressure which comes as markets welcome the appointment of Bessent as Treasury Secretary.


• Bessent aside, specifics for the yellow metal are somewhat light with the speaker docket devoid of the Fed, a situation which is likely to remain the case for much/all of the week given we have Thanksgiving closures on Thursday and Friday. Note, the latest FOMC minutes will be published on Tuesday.


• XAU fell from a USD 2720/oz peak early-doors to just below the 2.7k mark before briefly recovering. Thereafter, as the risk tone continued to improve, the yellow metal slipped back below the figure to a USD 2658/oz low.

3M LME Copper: +0.7%

• Bolstered by the risk tone. However, gains have been somewhat tempered by the relatively poor performance of China overnight.


• The region was indecisive for much of the APAC session as while Bessent’s appointment is likely a net-positive, China had to digest the latest MLF liquidity drain and a meeting between the White House and US NSA over China’s cyber espionage.


• 3M LME Copper is more firmly above the USD 9k mark, after slipping below it to a USD 8.95k trough on Friday. However, as outlined above, gains are somewhat limited with the benchmark yet to gain much ground above USD 9.05k.

25 Nov 2024 - 10:10- ForexGeopolitical- Source: Newsquawk