EUROPEAN COMMODITIES UPDATE: Crude underpinned but metals look for impetus

Analysis details (10:54)

WTI and Brent front-month futures remain elevated as the risk-off sentiment from earlier this week abates (for now), whilst China’s COVID situation is also seemingly improving – in turn subsiding some demand-side woes – with Shanghai aiming to reach the goal of reporting zero new COVID-19 cases at the community level by mid-May. That being said, gains are capped by reports suggesting the EU may omit the proposed Russian oil embargo in order to pass a sixth sanctions package against Russia. “One idea circulating would see other elements of the [Russian sanctions] package move ahead… But the complete ban on all imports of Russian crude and refined fuels could be put aside for now, while work continues on a compromise deal that Hungary can accept. ”, according to Politico. EU Foreign Ministers are set to meet on May 16th with a focus on the Russian oil embargo impasse. Meanwhile, EU's Foreign Representative Borrell believes that after the trip to Iran by EU negotiator Mora that nuclear discussions are unblocked – although Iran reiterated that this depends on the US side, whilst a source cited by WSJ’s Norman poured some cold water on any optimism. WTI resides around USD 107/bbl (106.29-108.13 intraday range) and Brent trades just under USD 109/bbl (107.79-109.79 intraday range). Over to metals, spot gold is flat under USD 1,825/oz (at the time of writing) with the yellow metal awaiting fresh fundamental catalysts. LME metals are now mixed with the earlier rebound somewhat fading; LME copper is in modest negative territory and re-threatening the USD 9,000/t mark to the downside.

13 May 2022 - 10:53- MetalsGeopolitical- Source: Newsquawk