EUROPEAN COMMODITIES UPDATE: Crude underpinned while metals succumb to the Dollar

Analysis details (09:44)

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  WTI and Brent front-month futures are firmer intraday following a choppy US session yesterday, which resulted in the benchmarks ultimately settling lower by just over USD 1/bbl apiece. The recovery from worst levels yesterday was supported by the weaker Dollar, while the larger-than-expected draws in gasoline and distillates in the weekly EIA data managed to draw some support for oil and the complex at the time. In the European morning, price action in oil is seemingly tracking the broader risk sentiment in Europe, with the region supported amid a slew of corporate earnings this morning ahead of the BoE (full preview in the Newsquawk Research Suite) and US PPI and IJC data. Ahead, participants also expect the OPEC Monthly Oil Market Report to be released today, with a focus on the balance of supply/demand following the recent OPEC+ surprise voluntary cuts announced at the start of April. WTI June sees some resistance ahead of USD 73.50/bbl (vs low USD 73.26//bbl) while Brent July reclaimed USD 77/bbl+ status (vs low USD 76.54/bbl).


• Elsewhere, spot gold remains within recent ranges with mild pressure emanating from a firmer Dollar, while the yellow metals continue to juggle banking sector woes and central bank developments – the yellow metal remains within yesterday’s parameter at the time of writing. Base metal prices meanwhile are softer across the board following the softer-than-expected Chinese CPI and PPI metrics, with 3M LME copper relinquishing the USD 8,500/t level and falling close towards USD 8,300/t. ING also flags that “China has seen a sizeable increase in refined copper exports over the last couple of months, suggesting that domestic demand is not as strong as many were expecting.” Meanwhile, ANZ Bank forecasts growth in copper demand to reach 4.1% in 2023, and said with supply-side constraints still prevalent, "we see the copper market moving back into a deficit this year".

11 May 2023 - 09:46- MetalsData- Source: Newsquawk