EUROPEAN COMMODITIES UPDATE: Crude oil and copper underpinned but spot gold remains subdued

Analysis details (10:59)

WTI and Brent futures consolidated overnight following the pause in momentum yesterday, but resistance at USD 100/bbl and USD 95/bbl respectively. The complex has seen some upside during the European morning despite a lack of newsflow for the complex, potentially catching up to the upside seen across stocks. Some desks suggest that the recent upside emanated as the market appears to have focused on the revisions higher the IEA made to its demand growth yesterday – which was on the back of gas-to-oil switching from the power sector. Add to that the reports that two pipelines in the Gulf of Mexico (GoM) being halted amid a leak at a booster station - the Mars and Amberjack pipelines – which can carry around 500k BPD from the GoM coast. There is also a focus on Germany’s Rhine River situation whereby reports suggested water levels are on track to breach critical levels for navigability today and potentially trigger disruptions to trade of fuels across the continent, according to German government data cited by Bloomberg. However, German press Faz suggested Germany does not expect low Rhine levels to halt ship traffic, thus markets may be on the lookout for further clarity on the key trade route that aids with the transit of oil and coal. WTI Sep resides around USD 94.50/bbl (vs low 93.60/bbl) while its Brent counterpart climbs back above USD 100/bbl (vs low 98.87/bbl). Commerzbank forecast a Brent end-2022 price of USD 90/bbl, as the market should be more than amply supplied for the time being, according to the German bank. Over to metals, spot gold is relatively uneventful as the firming Dollar keeps the yellow metal capped under USD 1,800/oz. Base metals markets are relatively mixed with the market breadth shallow, although LME copper extends on gains above USD 8k/t.

12 Aug 2022 - 10:58- Research Sheet- Source: Newsquawk