EUROPEAN COMMODITIES UPDATE: Crude picks up on trade optimism, gold remains steady

Crude Oil: WTI Sep +0.5%, Brent Oct +0.5%

• Modest gains across the crude complex, irrespective of the firmer Dollar, but as traders cheer the EU-US trade deal.


• To recap, the US will impose a 15% tariff on most EU goods entering the country, lower than the 30% that had been threatened but higher than the UK's 10% rate. EU carmakers will face a 15% US import tariff instead of the 25% global tariff introduced in April. EU exports of semiconductors and pharmaceuticals will also be subject to the 15% tariff. The US will retain a 50% tariff on EU steel and aluminium; the EU has accepted this but wants continued discussions on these metals. A quota system will be introduced for EU steel exports to the US. Zero-for-zero tariffs have been agreed for some agricultural products, aircraft component parts, and certain chemicals. No final agreement has been reached yet on tariffs for spirits. Aircraft exports are temporarily exempt from tariffs pending the outcome of a US investigation. Further, the EU will open its markets to US goods, with exceptions for only a few products. The EU will invest USD 600bln in the US, including in military equipment. The EU will purchase USD 750bln worth of US energy, mainly LNG. (Trump originally pushed for USD 1tln in energy purchases.) The EU agreed to reduce tariffs on many US agricultural products, though not all.


• Crude prices have waned from their best levels as some European officials expressed dissatisfaction with the EU-US deal.


• Elsewhere, the OPEC+ JMMC today is expected to be a non-event ahead of the August 3rd policy-setting confab, where sources previously suggested OPEC+ will discuss pausing the output hike from October, according to delegates cited by Bloomberg. Saudi Arabia reportedly already has a tentative plan to complete the revival of a 2.2mln BPD in September, with another monthly tranche of 550k barrels. Delegates added that OPEC+ will likely wait for some time before moving on to reversing another layer of halted production, which amounts to some 1.66mln BPD. That being said, "According to 3 OPEC+ delegates, there have been no talks related to a possible pause of the increments, all options are on the table for now.", via Kepler's Baker on July 11th.


• Analysts at ING suggest, "The group may feel emboldened to go with yet another large supply hike for September, given that prices are holding up relatively well despite supply increases already announced in recent months. We expect that OPEC+ will at least complete the full return of 2.2m b/d of the additional voluntary supply cuts by the end of September. This would work out to a supply hike in September of at least 280k b/d. However, there is clearly room for a more aggressive hike."


• WTI resides in a USD 65.05-65.80/bbl range while its Brent counterpart sits in a USD 67.55-68.27/bbl band.


• This week sees a slew of risk events, including the FOMC on Wednesday, NFP and ISMs on Friday, alongside the trade negotiation deadline on August 1st; with the EU and China likely sorted for now, attention turns to India, South Korea, Mexico and Canada.

Precious Metals: Gold U/C, Silver +0.4%, Palladium +1.8%

• Mixed trade with spot gold relatively flat amid a higher dollar but propped up as European officials react to the EU-US trade deal, with the yellow metal eyeing a slew of risk events this week.


• Spot palladium is outperforming as the auto sector cheers a reduced EU tariff of 15% on autos (vs prev 25%).


• Spot gold resides in a USD 3,324-3,345/oz range at the time of writing, vs Friday's USD 3,325-3,373.50/oz range.

Base Metals: 3M LME Copper -0.5%

• Mixed trade across precious metals as the upside from the EU-US trade deal is hampered by notable upside in the Dollar.


• ING highlights "copper inventories on the Shanghai Futures Exchange fell 13% to 73,423 tonnes on Friday to the lowest level since December. The drawdown in inventories follows Chinese Customs data released earlier this month, which showed imports of refined copper jumped 15% in June from the previous month. In other metals, inventories of aluminium and zinc both increased, up 6.4% to 115,790 tonnes and 8.8% to 59,419 tonnes, respectively."


• 3M LME copper resides in a USD 9,779.05-9,831.00/t range at the time of writing.

28 Jul 2025 - 10:00- MetalsEU Research- Source: Newsquawk