EUROPEAN COMMODITIES UPDATE: Crude trims losses but metals pressured by the firmer Buck

Analysis details (10:50)

WTI and Brent December contracts are lower intraday but off the trough amid the firmer Dollar and deterioration of broader risk sentiment, with the former back above USD 84/bbl (vs high 85.19/bbl) and the latter north of USD 92/bbl (vs high 93.06/bbl) at the time of writing. Gains across the complex were seen after a joint statement between Saudi and China suggested a readiness to cooperate on oil market stability and Saudi remains the most trusted China oil supplier, via Bloomberg. The Saudi energy minister also hit the wires today and suggested that OPEC+ is going to have a secure and sustainable market. Meanwhile, Barclays lowered its Brent 2022 forecast by USD 3/bbl and 2023 forecast by USD 5/bbl. The bank highlighted a USD 15-25/bbl downside to the 2023 price forecast if global demand is 1-2mln BPD lower. However, Barclays remains constructive on oil prices with respect to both consensus and the curve and suggested oil demand could undershoot estimates despite a potential easing of mobility restrictions due to a broader slowdown. Sticking with energy, the EU’s discussions on energy measures continue, with the Belgian PM suggesting that a second summit will probably be needed to agree on a bloc-wide energy package, while it will take two-to-three weeks for ministers to come up with how to implement a gas price cap. Elsewhere, precious and base metals are weaker amid the stronger Dollar. Spot gold posts modest losses and remains under USD 1,650/oz after dipping below yesterday’s lows. LME metals are lower across the board with 3M copper also weighed on by the risk mood – the red metal trades on either side of USD 7,500/t.

21 Oct 2022 - 10:50- Research Sheet- Source: Newsquawk