EUROPEAN COMMODITIES UPDATE: Crude rises as secondary Russian oil sanctions loom alongside US-Russia talks

Crude Oil: WTI Sep +1.1%, Brent Oct +1.1%

• Firmer trade in the crude complex despite a lack of fresh catalysts during the European morning, but as traders deal with the uncertainty of US secondary tariffs for the purchase of Russian oil.


• With India in the firing line for Russian crude purchases, attention also turns to China, with still no updates on whether the US-China trade truce will be extended.


• "If India were to stop buying Russian oil amid tariff threats, we believe the market would be able to cope with the loss of this supply. It would wipe out the surplus we’re expecting in the market through the latter part of this year and much of 2026. This would leave some upside to prices, but a manageable one...The bigger risk is if other buyers also start to shun Russian oil.", say the analysts at ING. Russia's crude output was slightly above the OPEC+ target in July.


• A US delegation is in Moscow on Wednesday/Thursday, with some reports suggesting Russian President Putin could offer some minor concessions, although it remains to be seen if this is enough for Washington.


• Overnight, the API was supportive for the crude complex with a larger-than-expected [US Private Inventory Data (bbls): Crude -4.2mln (exp. -0.6mln), Distillate +1.6mln (exp. +0.8mln), Gasoline -0.9mln (exp. -0.4mln), Cushing +1.7mln] - traders look for confirmation via the DoEs.


• WTI resides in a 65.11-65.91/bbl range while Brent sits in a USD 67.74-68.43/bbl range.

Precious Metals: Gold -0.5%, Silver -0.1%, Palladium -0.6%

• Precious metals trade lower across the board with global haven assets on a slightly softer footing this morning.


• The US day sees the release of weekly MBA mortgage applications data. Today's speakers include: Fed's Collins (2025 voter), Fed's Cook (voter), and Fed's Daly (2027). President Trump is to make an announcement at 16.30EDT/21:30BST at the Oval Office; there have been reports overnight that Trump is readying fresh sanctions against Russia’s shadow fleet if Russian President Putin does not agree to a ceasefire in Ukraine by Friday; follow-up reports stated that Trump will make a determination on sanctions on countries that purchase Russian energy too.


• Analysts at UBS reiterated their view that "hedges remain a vital component of any well-diversified portfolio, with our analysis suggesting an allocation of around 5% to gold is optimal (for those with an affinity to the yellow metal). We maintain a long position in our global asset allocation, with a target of USD 3,500/oz (in our central case). However, if things deteriorate, geopolitically or economically, then our upside risk case of USD 3,800/oz cannot be ruled out."


• Price action this morning has been contained for the yellow metal, in a USD 3,364.97-3,385.36/oz range, compared to yesterday's USD 3,349.89-3,390.60/oz parameter, and with the 50 DMA today at USD 3,346.41/oz.

Base Metals: 3M LME Copper +0.4%

• Regains some composure following recent selling pressure, but the recovery is limited amid the mixed risk appetite in Asia and Europe.


• Newsflow has remained light this European morning, although traders are on the lookout for further last-minute deals ahead of tomorrow's tariff implementation day, whilst the jury is still out on a US-China trade truce extension.


• 3M LME copper prices reside in a USD 9,625.20-9,692.00/t range.

06 Aug 2025 - 10:15- ForexGeopolitical- Source: Newsquawk