EUROPEAN COMMODITIES UPDATE: Crude loses steam but metals bounce as the Buck pulls back

Analysis details (09:43)

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  WTI and Brent futures are off the best levels seen overnight as sentiment remains cautious throughout the European morning ahead of several central bank speakers including Fed Chair Powell and Fed’s Williams. Yesterday, WTI June and Brent July settled lower by around USD 1/bbl apiece following hawkish Fed commentary, while a recovery in prices occurred after settlement as sentiment state-side was boosted by hopes of a resolution to avoid a US debt default. Other bullish factors overnight include the meeting between China and Central Asian countries, in which President Xi proposed establishing meeting and dialogue mechanisms in cooperation between China and Central Asian countries, whereby mechanisms will also cover agriculture, transportation, emergency management, education and political party affairs. China also stated it will roll out more trade facilitation measures and upgrade bilateral investment agreements with Central Asian countries. In terms of OPEC commentary, Saudi's Energy Minister said coordination with OPEC+ countries is a cornerstone of the efforts to enhance the stability of oil markets and maintain their balance, according to the state news agency. On that note, BofA said OPEC is likely to take more barrels out of the market and oil prices are to head higher in Q2 on supply deficit. WTI July resides just above USD 72.00/bbl (vs high 72.80/bbl) and USD 76.00/bbl (vs high 76.78/bbl) respectively.


• Over to metals, spot gold is on a firmer footing as the DXY declines, but although the yellow metal is back above USD 1,950/oz, prices are still a way off from yesterday’s 1,986.07/oz high, and this week’s 2,022.12/oz peak – hit by the Dollar rebound this week as banking concerns and debt ceiling woes ease. Elsewhere, base metals are also benefitting from the intraday Dollar losses as the sector attempts to clamber back some of this week’s losses, with 3M LME copper still under USD 8,300/t but towards the top end of today’s USD 8,140-289.50/t parameter at the time of writing. Ahead, participants will be eyeing central bank speakers amid a lack of Tier 1 data releases. Sticking with metals, the G7 leaders’ statement said the group will continue efforts to reduce Russia's revenue from metals, which could be of note for the likes of iron, steel, aluminium, gold, and platinum.

19 May 2023 - 09:47- MetalsEU Research- Source: Newsquawk