EUROPEAN COMMODITIES UPDATE: Crude trims gains and base metals buckle on China’s curbs

Analysis details (10:49)

WTI and Brent futures have dipped from overnight highs as risk sentiment remains cautious and traders are wary of China’s COVID situation. To recap, Beijing's Chaoyang district is to close all entertainment venues whilst Shanghai will lock down the Minhang district on Saturday morning for mass COVID-19 testing – which adds uncertainty and fluidity to the demand side of the equation. WTI Jul’ has dipped under USD 122/bbl (vs high 122.72/bbl) while Brent Aug’ resides under 123.50/bbl (vs high 124.34/bbl). In terms of the Iranian Nuclear Deal, Iran has removed 20 cameras and other surveillance equipment belonging to the IAEA, according to a diplomatic source for Al Jazeera citing IAEA Chief Grossi - Grossi is due to speak at 12:15BST/07:15ET. More interestingly, a dichotomy is seen between US and European nat gas prices following an explosion at the Freeport LNG export facility – with US NatGas -6% and Dutch TTF rising over 13% at one point - "[the explosion] will weigh on LNG exports and leave more gas in the domestic market. However, this should prove supportive for European hub prices as well as spot Asian LNG prices, given that the LNG market is already tight", ING highlights. However, European demand for gas will be seasonally lower in the summer vs the winter, and thus the timing of the three-week shuttering could be worse. Dutch TTF trimmed gains in recent trade. Elsewhere, spot gold trades on either side of USD 1,850/oz but with the range contained ahead of the ECB and tomorrow’s US CPI metric. From a technical perspective, the 200 DMA (1,842.48/oz) and 21 DMA (1,842.90/oz) nearly overlap, whilst the 50 DMA sits around USD 1,885/oz. Base metals pulled back overnight amid China’s COVID woes alongside the overall cautious risk tone – but, LME copper holds onto a USD the 9,500/t+ handle.

09 Jun 2022 - 10:47- MetalsData- Source: Newsquawk