EUROPEAN COMMODITIES UPDATE: Crude slips post-OPEC and amid ongoing trade woes

Crude Oil: WTI Sep -1.0%, Brent Oct -1.0%

• Choppy trade and now ultimately softer following the initial modest gap lower at the reopen in the aftermath of the OPEC+ decision on Sunday and after the NFP and ISM-induced slide on Friday.


• To recap, OPEC+ said in a statement that eight members will raise oil output by 547,000 bpd in September (some sources last week suggested it could be lower), citing steady global economic growth, tight inventories, and healthy market fundamentals. This marks a full and early reversal of the group’s largest tranche of output cuts and is part of a broader strategy to regain market share. The move follows a series of accelerated hikes starting in April, with production increases each month. The eight countries are scheduled to meet again on September 7th, where they may consider reinstating another 1.65mln bpd of cuts that are currently in place until the end of 2026, according to Reuters sources. Analysts say OPEC+ has so far managed to return supply without destabilising prices, though navigating the next phase of unwinding cuts will be more complex.


• In geopolitics, Trump on Friday confirmed the deployment of two US nuclear submarines to the region, without clarifying whether they are nuclear-armed or powered. US President Trump also announced that his special envoy, Witkoff, will travel to Russia this week—likely Wednesday or Thursday—to continue discussions aimed at securing a ceasefire in the Ukraine war. Meanwhile, Ukraine’s military said it struck Russia’s Ryazan oil refinery again.


• In terms of news on China, USTR Greer said the trade truce deadline for China is still under discussion. Meanwhile, China rejected the US request to stop importing oil from Iran and Russia, according to reports. More domestically, Shanghai Securities News suggested China could step up monetary easing efforts in H2 2025 by cutting benchmark interest rates and banks’ RRR in order to guide overall financing costs lower and support the economy.


• Elsewhere, BP made its largest oil and gas discovery in 25 years off the coast of Brazil, although the company said it was too early to assess the size or quality of the reserves, but warned elevated CO2 has been detected, which could complicate extraction.


• WTI resides in a 66.56-67.62/bbl range while Brent sits in a USD 68.90-69.88/bbl range.

Precious Metals: Gold -0.2%, Silver +0.5%, Palladium -0.2%

• Mostly softer trade across precious metals as the Dollar claws back some ground after Friday's data-induced losses, with spot gold on Friday topping its 50 DMA (USD 3,342.70/oz) before reaching a USD 3,363.60/oz peak (from a USD 3,281.75/oz intraday low).


• Price action this morning has been a bit more contained as the yellow metal takes a breather, with support found near its 50 DMA this morning, as spot gold resides in a USD 3,345.00-3,364.81/oz range at the time of writing.


• Note, reports have suggested that Citi's gold bears have shifted to bullish amid US growth and inflation concerns, and expect the yellow metal to trade between USD 3,300-3,600/oz over the next three months.


• In terms of influential state-side news for the yellow metal, US President Trump said he would remove Fed Chair Powell in a heartbeat, but added that removing Powell would disturb the market, while he stated Powell will most likely stay on as Chair, and he will appoint a new Fed Chair once Powell’s term ends. US President Trump said he is to announce a replacement for Fed's Kugler in the next couple of days after the Fed announced on Friday that Governor Kugler is resigning from the Fed board effective August 8th.


• Following the poor jobs report, US President Trump said on Friday that he was informed the US jobs numbers are being produced by a Biden appointee who faked job numbers before the election to try to boost Kamala Harris’s chances of victory, and he directed his team to fire her immediately. Furthermore, Trump said on Sunday that he will announce a new head of BLS in the next three or four days, while he also commented that there could be a dividend or distribution of money to Americans from tariff revenues.

Base Metals: 3M LME Copper +0.4%

• Mixed trade across base metals amid quieter weekend newsflow and a relatively uneventful European session thus far in terms of macro impulses.


• Desks suggest the recent rise in copper is driven by growing concerns over supply disruptions following the disaster at Codelco’s El Teniente mine, dubbed one of the world’s largest underground copper operations.


• Little move was seen on reports that China could step up monetary easing efforts in H2 2025 by cutting benchmark interest rates and banks’ RRR in order to guide overall financing costs lower and support the economy, according to Shanghai Securities News.


• Sticking with China, the country’s copper smelters face a production cut as a persistent ore shortage forces output down from July’s record 1.174mln tons to 1.168mln tons in August, with further declines expected in September, amid government efforts to reduce overcapacity across industries, Bloomberg reported.


• 3M LME copper prices reside in a USD 9,635.10-9,696.80/t range.

04 Aug 2025 - 09:55- ForexGeopolitical- Source: Newsquawk