EUROPEAN COMMODITIES UPDATE: Crude tilts higher with US-Iran negotiations seemingly at a stalemate

Crude Oil: WTI Jul +0.2%, Brent Aug +0.2%

• Tilting upwards in early European hours after taking a breather in APAC trade after advancing yesterday amid the positive risk appetite and ongoing geopolitical tensions, with demand contained overnight following mixed private sector inventory data.


• US Private Inventory Data (bbls): Crude -3.3mln (exp. -1mln), Distillates +0.8 (exp. +1mln), Gasoline +4.7mln (exp. +0.6mln), Cushing +1.0mln.


• The session in Europe for crude oil kicked off with early comments from the Iranian Supreme Leader, who suggested the US nuclear proposal is 100% against "the principle of our power". This comes after the US proposed an interim step in Iran nuclear talks allowing some enrichment, according to the NY Times.


• Elsewhere in geopolitics, Russia's Deputy Foreign Minister said NATO's planned Baltic drills are part of the alliance's preparations for a potential military clash with Russia, according to TASS.


• Meanwhile, desks suggest the wildfires in Canada's Alberta region are also providing a boost to prices, albeit some of that supply risk is tempered down for now amid rainfall in the region, but desks warn that the relief could be short-term due to forecasts of drier weather towards the back end of the week.


• Analysts at ING suggest "There continue to be clear signs of tightness in the spot oil market as we move closer towards the Northern hemisphere summer."


• Tight parameters are seen across crude futures - WTI Jul resides in a USD 63.07-63.52/bbl range while Brent Aug sits in a USD 65.31-65.77/bbl band.

Precious Metals: Gold +0.1%, Silver -0.2%, Palladium -0.4%

• Mixed trade across precious metals as traders await the next macro catalyst, with spot gold and silver caged to narrow ranges.


• Spot palladium narrowly underperforms, potentially with headwinds from European auto supplier association Clepa who said production lines and a couple of plants are already shut due to China rare earth export curbs; impact likely to grow in the next 3-4 weeks, and only 1/4 of licence requests have been granted since early April.


• On gold, analysts at ING suggest that "central banks are likely to continue to add gold to their reserves, given the uncertain economic environment and the efforts to diversify away from the US dollar."


• XAU/USD currently trades in a USD 3,346.53-3,372.71/oz range and well within yesterday's USD 3,333.17-3,392.30/oz.

Base Metals: 3M LME Copper +0.4%

• Base metals are tilting firmer in tandem with upticks seen across equities, and in broader sentiment, albeit gains are capped ahead of risk events including a slew of Fed speakers, the US Jobs report on Friday, but arguably more importantly for the complex, traders await news on a potential call between US President Trump and Chinese President Xi.


• To recap, US President Trump is reportedly set to speak with Chinese President Xi on Friday, according to sources. It was also reported that the White House Press Secretary said the Trump-Xi call will be held very soon. She also stated regarding China's critical mineral curbs that the White House is actively monitoring compliance with the Geneva trade agreement. US President Trump this morning posted, "I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!", via Truth Social.


• Elsewhere, Peru's Mining Minister said there is a rise in informal and illegal mining activity in two major copper production regions.


• 3M LME copper remains firmly above USD 9,500/t in a current USD 9,615.60-9,676.50/t range.

04 Jun 2025 - 10:15- ForexGeopolitical- Source: Newsquawk