EUROPEAN COMMODITIES UPDATE: Crude recuperates from Friday’s pressure while metals diverge

Analysis details (11:00)

• Crude benchmarks are firmer and have continued to climb despite a lack of fundamental updates occurring in European hours, with the move primarily a recovery from Friday’s pressure and aided by geopolitics alongside a softer USD. Elsewhere, spot gold is little changed with the overall tone a tentative one as we await fresh catalysts and continue to analyse last week’s data and potential associated Fed implications. Finally, base metals are generally firmer owing to the constructive APAC tone.


• As it stands, WTI Dec’23 and Brent Jan’24 contracts are at the top end of circa. USD 1.50/bbl parameters but remain well within Friday’s and by extensions last week’s parameters. As mentioned, much of this morning’s move can perhaps be best described as a paring of Friday’s pressures. However, the available catalysts are bullish. Specifically, geopolitical tensions continue to flare with rhetoric from Israel’s Netanyahu drawing attention while there have been numerous air-strikes/rocket attacks by parties on all sides of the conflict over the weekend. Additionally, both Saudi Arabia and Russia confirmed their commitment to ongoing voluntary production cuts whilst the former also refrained from lowering OSPs to Asia, as some had expected; though, there was a large reduction to NW Europe.


• Spot gold remains contained in familiar and narrow parameters in very close proximity to the 10-DMA at USD 1986/oz; currently, XAU is at the mid-point of USD 1980-1992.99/oz bounds. As mentioned, specific newsflow has been very light with the US docket ahead also sparse aside from a handful of speakers including Fed’s Cook and then the SLOOS. In contrast, base metals are generally firmer with gains in excess of 1.0% seen in LME Copper. Action which is seemingly a continuation of the firm APAC handover where the region was bolstered in reaction to Friday’s NFP report alongside remarks from China’s Premier who said they will shortly be releasing a plan to promote high-standard institutional opening up in the Shanghai Free Trade Zone.

06 Nov 2023 - 10:51- Research Sheet- Source: Newsquawk