EUROPEAN COMMODITIES UPDATE: Crude oil edges higher but metals under mild pressure in a quiet European morning

Analysis details (10:55)

WTI and Brent July futures consolidated overnight but now trade with mild gains, though the overall tone in the market remains indecisive amid quiet newsflow. WTI July trades on either side of USD 111/bbl while its Brent counterpart prints around USD 114.50/bbl. Fundamental developments have been somewhat quiet. There is little new to add on China’s COVID situation, whilst the Russian oil embargo awaits the EU’s decision after Hungarian PM Orban sent a “wish list” of demands that would lead to no vetos from Budapest. Meanwhile, there were reports via Politico that EU diplomats are considering a split embargo that would first focus on seabound oil before pipeline oil. WSJ’s Norman suggests that “exempting pipeline oil isn’t a solution to Hungary’s objections. It’s a cave-in” as it was one of Hungary’s official demands earlier in the month that was rejected. There has also been noise that the oil embargo can be jettisoned from the sixth sanctions package, if required. Traders will likely also keep an eye on sentiment whilst volumes are softer amid mass market closures in Europe. Note, Brent July options expire today. Over to metals, spot gold is under pressure in recent trade with bond yields also recovering from the earlier pullback; spot gold remains sub USD 1,850/oz. Base metals are softer across the board as the risk tone remains cautious, with LME copper losing further ground under USD 9,500/t.

26 May 2022 - 10:55- MetalsResearch Sheet- Source: Newsquawk