EUROPEAN COMMODITIES UPDATE: Crude wanes off best levels but base metals rebound as China heads for its long break

Analysis details (10:05)

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  WTI Nov and Brent Dec futures have waned off best levels in early European hours following a respectable rally yesterday which saw the November contracts settle higher by USD 3.29/bbl and USD 2.59/bbl respectively. Oil prices surged back to fresh YTD peaks on Wednesday amid mixed inventory data and in the face of a surging Dollar and broader risk aversion, with the complex ultimately underpinned by bullish fundamentals heading into Q4. The pullback this morning coincided with the German Economic Institutes forecasting a 0.6% German GDP contraction in 2023, with a 0.3% contraction in Q3 followed by 0.2% growth in Q4. That being said, profit-taking following the recent rally cannot be dismissed. From an OPEC standpoint, the Russian Energy Minister earlier this morning said the ban on fuel exports will last until the market stabilises, according to Tass, while additional measures could be taken on the fuel market. These comments come ahead of the JMMC confab with no change in policy expected. The meeting is part of the routine confabs to evaluate market fundamentals, whilst Saudi Arabia, earlier in September, suggested voluntary cut decisions will be reviewed monthly to consider deepening the cut or increasing production. WTI Nov resides just above USD 93.50/bbl (in a USD 93.42-95.03 range) while Brent Dec sits around USD 94.50/bbl (in a USD 94.05-95.35.bbl parameter).


• Over to metals, spot gold remains suppressed by the recent rise in the Greenback, with prices drifting lower yesterday before finding stability around the USD 1,975/oz mark, with the yellow metal moving sideways on either side of the level overnight and in European trade. The next obvious level to the downside is at 1,867.51/oz which marks the 13th of March low. Base metals meanwhile are firmer across the board with some noting of potential demand as China enters its long Mid-Autumn festival holiday break starting from tomorrow – 3M LME copper has risen around USD 100/t from session lows and sits near intraday highs of USD 8,183.50/t at the time of writing.

28 Sep 2023 - 10:08- MetalsData- Source: Newsquawk