EUROPEAN COMMODITIES UPDATE: Crude lifted amid the “risk-on” narrative while TTF relinquishes EUR 200

Analysis details (10:50)

Crude benchmarks are bid alongside upside in the equity space and pressure in fixed income, though an overall “risk on” narrative is somewhat skewed by the pronounced JPY appreciation. As it stands, WTI Sep’22 and Brent Oct’22 are posting gains in excess of 2.0% on the session but remain capped by USD 100/bbl and 105/bbl respectively and as such are well within recent ranges. Focus for the morning has, aside from the earnings-driven tone, been on commentary from Russia and Saudi Arabia ahead of next week’s OPEC+ meeting with the nations reaffirming a commitment to the organisation’s goals alongside discussing bilateral cooperation. Additionally, a readout from the French President Macron’s conversation with the Saudi Prince saw a call for the diversification of energy supplies. Interestingly and featuring into the energy front but with a geopolitical angle, Russia has reportedly transferred USDs to Turkey for a USD 20bln nuclear facility, according to Bloomberg; though, details on this remain light. Elsewhere, but continuing with Russia, the nation is looking to propose a date/time for a call between Foreign Minister Lavrov and US Secretary of State Blinken and while the possible meeting does not have an agenda, Lavrov said he is interested in hearing Blinken’s proposals around the export of Russian grain. Additionally, the Ukrainian port authority Risoil says they will be conducting a test-run of exports on Friday. On the gas front, Dutch TTF Sep’22 has pulled back to modestly below the EUR 200/mWh mark, but remains bid after several sessions of pronounced price action amid what is more of a consolidation from recent multi-year highs in excess of EUR 225/mWh. For reference, Nord Stream physical flows remain in-line with the ~14.4mln kWh/h figure. Moving to metals, spot gold is relatively contained and resides just above the unchanged mark but continues to be dictated by the USD with the JPY-induced pressure lifting the yellow metal briefly overnight to near USD 1770/oz vs current USD 1757/oz. Elsewhere, base-metals derived respite from the USD amid a deterioration in China’s risk sentiment overnight as the region reacted to commentary from China’s commerce ministry which highlighted risks to trade and the H2 outlook.

29 Jul 2022 - 10:50- Research Sheet- Source: Newsquawk