EUROPEAN COMMODITIES UPDATE: Crude pullback despite bullish catalysts while base metal prices inflate

Analysis details (10:40)

• WTI and Brent are in the red as the pullback during the latter half of last week continues, despite broader sentiment being generally constructive. Base metals are bolstered by the latest data from China and strong performance in associated trade while precious peers are also firmer as the USD wanes.


• WTI and Brent continue to pull back from last week’s best levels, though price action has been relatively contained thus far with the benchmarks lower by around USD 0.50/bbl. Interestingly, the pullback has been in place despite a number of theoretically bullish supply-side headlines over the weekend. Firstly, Libya’s Ras Lanuf, Zueitina, Brega and Es Sider oil ports have closed for three days from Sunday due to the expected arrival of Hurricane Daniel. Secondly, Iraq’s oil ministers said that they could not come to an agreement with Turkey around the immediate resumption of their northern oil exports. Finally, Iraq set its October Basrah OSP to Asia at a USD 1.80/bbl premium; albeit, the OSPs to Europe and the Americas were set at discounts.


• Moving to gas, we continue to await an update from Offshore Alliance and/or Chevron following the commencement of industrial action last Friday at various Australian sites. Thus far, there has not been any new information on whether the sides remain in discussion following the breakdown of talks late last week. As a reminder, Offshore Alliance has already filed notice for further industrial action from September 14th, which would see an escalation of work-bans and multiple rolling stoppages.


• For metals, as mentioned base counterparts are experiencing marked upside in European trade, LME Copper +1.6%, in a continuation of APAC action which was spurred by Chinese sentiment as the region's headline inflation measure moved out of deflationary territory, though was still softer than forecast. Upside which is also being spurred on by a slightly softer USD that appears to be providing some support to spot gold, despite the generally constructive risk tone. The yellow metal is holding around USD 1925/oz and as such once again remains between its 10-, 50- and 200-DMAs.

11 Sep 2023 - 10:36- Research Sheet- Source: Newsquawk