EUROPEAN COMMODITIES UPDATE: Crude sees choppy trade whilst metals are weighed on by the Buck

Analysis details (10:40)

WTI and Brent Dec futures are firmer intraday after yesterday’s decline, which saw Brent dip under USD 90/bbl but settle at the figure. Trade this morning has been choppy with news flow for the complex on the lighter side - WTI Dec trades around USD 83/bbl (81.72-83.34/bbl range) whilst Brent Dec resides just under USD 91/bbl (89.32-90.99 range). In today’s session, traders are on the lookout for President Biden’s SPR release statement in which he is to announce 15mln additional barrels for delivery from SPR in December – this will be part of the 180mln barrels release announced earlier in the year. According to a senior admin official, Biden’s administration agreed to make future oil purchases to refill reserves at prices at or below USD 67.00-72.00/bbl, whilst President Biden stressed to advisers that they need to be vigilant and if significant additional SPR sales are needed in the coming months, they are prepared to do so. The official added that Biden’s administration is keeping all tools on the table including limiting fuel export to tackle energy prices, whilst suggesting the oil industry should take President Biden's move as a signal to raise production. From a data perspective, yesterday’s Private Inventory metrics printed a surprise draw in headline crude (-1.3mln vs exp. +1.4mln), whilst gasoline saw a larger-than-expected draw, and distillates a smaller-than-expected draw – the weekly DoEs will be eyed for confirmation. Elsewhere, spot gold trades lower intraday and back under the USD 1,650/oz mark as the Dollar picks up in pace. LME metals are mostly softer amid the firmer Dollar and risk aversion, with 3M copper extending its losses under USD 7,500/t. Meanwhile, LME aluminium stocks saw another hefty increase, whilst sources yesterday suggested Glencore reportedly delivered Russian-origin aluminium into the LME system.

19 Oct 2022 - 10:40- Research Sheet- Source: Newsquawk