EUROPEAN COMMODITIES UPDATE: Crude uneventful ahead of OPEC+ whilst precious and base metals slip

Crude Oil: WTI Jul -0.1%, Brent Jul -0.1%

• Uneventful choppy trade within recent ranges in the run-up to the OPEC event this week - full primer available on the Newsquawk headline feed.


• OPEC+ will virtually convene its Joint Ministerial Monitoring Committee (JMMC) on Wednesday, with the full OPEC and OPEC+ meetings also set to take place following the JMMC. However, the meeting of the eight OPEC+ countries conducting the voluntary cuts will now take place on May 31st as opposed to the originally scheduled June 1st. The market focus will be on the Saturday meeting, assuming no policy decision is front-run and announced at the Wednesday meeting. OPEC sources will likely be noisy on the wires ahead of the weekend meeting.


• Delegates are reportedly discussing the prospect of a third consecutive output hike, according to Bloomberg sources, on May 22nd. Bloomberg sources suggest a potential 411k BPD increase for July is under consideration — three times the originally scheduled monthly hike — although no final decision has yet been reached. Russian Deputy PM Novak on Tuesday, when asked whether OPEC+ discussed an oil output increase by another 411k BPD from July, replied that nothing has been discussed yet.


• Goldman Sachs: Predicts that OPEC+ will pause further hikes after agreeing on the increase for July. GS added that lower oil prices in 2025–2026 (i.e. a near-term surplus) may lead to an earlier and lower peak for US shale production. HSBC: Expects OPEC+ to announce another accelerated supply hike for July, similar to May/June and then pause in Q1'26. HSBC sees rising downside risks to Brent forecasts of USD 68.50/bbl and USD/bbl for 2026. ING: “We’re assuming in our balance sheet that the group will agree to increase output by another 411k BPD in July. This should keep the market well supplied over the second half of this year.”


• Elsewhere, UK and US traders will get the first chance to react to weekend reports that US President Trump said he received a call from European Commission President von der Leyen requesting an extension on the June 1st deadline on the 50% tariff with respect to trade and the European Union and he agreed to the extension to July 9th, 2025, while he added that the Commission President said that talks will begin rapidly.


• In geopolitics, German Chancellor Merz backs Ukraine’s long-range missile strikes on Russia, whilst Israeli PM Netanyahu said on Monday regarding hostage deal negotiations that he hopes they will have news regarding the hostages today or tomorrow.


• WTI currently resides in a USD 61.08-62.14/bbl intraday range with its Brent counterpart in USD 64.36-64.98/bbl confines.

Precious Metals: Gold -1.2%, Silver -1.1%, Palladium -0.8%

• Precious metals are posting losses in European hours, with early pressure seen as Shanghai commodities trade got underway, particularly for the yellow metal, amid several factors including 1) USD strength, caused in part (in more recent trade) by EUR losses after softer French Prelim CPI, 2) Unwinding of some risk premium as UK and US traders react to US delaying the EU tariffs, 3) technical factors with the yellow metal dipping under overnight support (USD 3,325/oz), yesterday's low (3,323.50/oz) and eventually, but briefly, the USD 3,300/oz.


• Spot gold remains within last Friday's range of USD 3,287.07-3,366.01/oz.


• Elsewhere, it was reported that Swiss gold exports decreased by 31% in April to 104 tons.

Base Metals: LME Copper +0.3%

• Base metals are subdued, and are sidelining the positive sentiment across equities, with the LME back up and running after the long weekend, whilst prices are pressured by the strengthening USD, irrespective of the constructive US-EU trade news from over the weekend.


• 3M LME copper remains above USD 9,500/t with a current intraday parameter between USD 9,561.95-9,640.00/t.


• The China Steel Association said China is working to control steel capacity to resolve the mismatch between supply and demand - this pressured Dalian iron ore overnight with the front-month contract ending daytime trade with losses of 1.8%.

27 May 2025 - 09:55- MetalsGeopolitical- Source: Newsquawk