EUROPEAN COMMODITIES UPDATE: Crude subdued, metals buoyed by the Buck, and Platinum shines ahead of the Queen’s Jubilee

Analysis details (10:45)

WTI and Brent futures are subdued heading into the OPEC+ confab later – which is poised to be much more interesting than the meetings in recent months. In terms of a brief primer, oil producers were initially expected to continue with the pact of increasing output by the previously agreed amount of 432k BPD – expectations backed by six OPEC sources via Reuters last week. However, what was originally viewed as another smooth/uneventful meeting, has the potential for fireworks amid several more recent source reports: 1) WSJ reports said OPEC members are mulling suspending Russia's participation in the OPEC+ pact amid sanctions, 2) FT hinted at talks of an immediate ramp-up in output via Saudi and the UAE, which could be announced on Thursday. 3) Energy Intel suggests that an alternative to a continuation of the usual pact would be to increase the monthly increment. 4) Reuters said Russian compensation could be approved gradually. Thus, this meeting could see some fireworks (Full Newsquawk Preview available here). Elsewhere, EU ambassadors broke off yesterday’s meeting without the final endorsement of the sixth sanctions package against Russia amid opposition from Hungry. Ambassadors could reconvene today in Luxembourg, according to BBC’s Jessica Parker. WTI Jul resides around USD 113/bbl (vs high USD 115/bbl) while Brent Aug resides just under USD 114/bbl (vs high 115/bbl). Elsewhere, metals are largely supported by the softer dollar across the board. Spot gold meanders around USD 1,851/oz with gains capped by bond yield action. Dalian iron ore futures hit a six-week high amid demand heading into the long Chinese weekend. Platinum futures see modest gains, with the CME July contract back on above USD 1,000/oz.

02 Jun 2022 - 10:45- MetalsGeopolitical- Source: Newsquawk