EUROPEAN COMMODITIES UPDATE: Crude recovers and gold feels support from a softer Buck, eyes on US CPI

Analysis details (10:48)

WTI and Brent front month futures are firmer on the session with the complex paring some of its recent losses. China’s COVID situation is seemingly taking a turn for the better, whilst the fear of a total halt of Russian gas transit further underpins prices. Initially, prices were subdued as the weekly APIs reported a small surprise build in inventories, with eyes on today’s DoE release – but before that, US CPI will take centre stage. Elsewhere, Dutch TTF gas futures eased off the highs yesterday after Ukraine’s gas grid operator (GTSOU) declared force majeure on the transit of Russian gas through Sokhranivka. For Reference, Gazprom continues gas shipments through Ukraine, Wednesday's volume is 72mln cubic metres (95.8mln on Tuesday). As a reminder, Gazprom said it received a notification from Ukraine that it will stop gas transit to Europe via Sokhranivka from 07:00 local time on May 11th and that Ukraine proposed to switch all gas transit to Sudzha, but added that it was "technologically impossible" to shift all volumes to the Sudzha interconnection point; while Gazprom said it saw no proof of a force majeure and no obstacles to continuing gas transit as before, according to Reuters. Elsewhere, the Iranian Chief Negotiator and EU's Foreign Policy Chief Mora meeting today to attempt to make some progress on the Nuclear Deal – note, on Monday, Iran's foreign ministry said that the visit of EU negotiator Mora to Tehran this week is not expected to create a breakthrough in the stalled talks. Currently, WTI Jun resides around USD 103/bbl (vs low USD 98.20/bbl) whilst Brent Jul trades around USD 106/bbl (vs low USD 101.30/bbl). Elsewhere, spot gold probes USD 1,850/oz to the upside amid the softer Buck, whilst LME metal futures trade relatively mixed, with 3M copper firmer on the day but still under USD 9,500/t. ING notes that “LME aluminium prices continue to fall and have largely ignored a steep decline in on-warrant stocks and a large number of cancelled warrants from Asia, signalling further declines.”

11 May 2022 - 10:48- EnergyData- Source: Newsquawk