EUROPEAN COMMODITIES UPDATE: Crude moves sideways, spot gold holds onto USD 1,700/oz and base metals fall post-Chinese data

Analysis details (10:37)

WTI and Brent front-month futures have been moving sideways around the USD 96/bbl and USD 99.75/bbl marks respectively since the reopening of futures trading overnight as President Biden is poised to meet with Saudi King Salman and Crown Prince Mohammed bin Salman in the quest for more oil. The meeting will likely see a more geopolitical/human-rights-related agenda as opposed to the meaningful addition of oil barrels. Prior guidance also suggested the meeting will take place from July 15th-16th, thus we could see updates over the weekend. Reports this morning suggested the US is not expecting Saudi Arabia to immediately boost oil production, US eyes the next OPEC+ meeting, according to a US official cited by Reuters. This is in fitting with FT sources on July 11th which suggested that "The US does not expect any specific announcements on oil production at this week’s summit but anticipates further increases in the future". The upcoming OPEC+ meeting on August 3rd will be the one the group decides on the new policy for September, which has not seen any guidance yet. It is unlikely Saudi will act unilaterally and outside the framework of OPEC+, with such a move likely to ruffle the feathers of OPEC+ partners, particularly the likes of the UAE. On that note, the UAE said it wants more stable oil markets, but will abide by the OPEC+ decision. On the COVID front, reports via Chinese press suggested China's Huaiyuan county has announced a lockdown amid COVID, according to local TV, with 151 prelim cases reported on July 14th, according to CCTV On the gas front, it’s worth noting that Uniper has begun using gas from storage following the recent cut from Russia, according to Bloomberg. Over to metals, spot gold has been teetering above the USD 1,700/oz mark, whilst reports suggested the European Commission is to adopt Friday its seventh Russian sanctions package which will add the ban on imports of Russian gold – updates that have been alluded to in recent weeks. Copper, iron, and nickel all printed fresh YTD lows as China’s Q2 GDP and Industrial Production data for June all missed forecasts. LME 3M copper fell below USD 7,000/t for the first time since November 2020.

15 Jul 2022 - 10:36- MetalsData- Source: Newsquawk