EUROPEAN COMMODITIES UPDATE: Crude whipsaws whilst metals post cautious gains

Analysis details (10:45)

Crude futures trade choppy following yesterday’s beating which saw WTI June and Brent July both settle lower by around USD 6.50/bbl apiece. The losses yesterday were due to a concoction of factors including the broader risk-off mood, concerns over China’s lockdowns, recession fears, rising rates, and the EU failing to agree on a Russian oil ban – with desks suggesting a watered-down version may need to be passed to move forward. Meanwhile, Hungary also suggested that the EU's time pressure for the Russian oil embargo is "artificial". “The failure of the EU to come to a quick unanimous decision would have also likely weighed on the market yesterday,” ING writes, adding that the latest Chinese data only adds fuel to the demand slowdown argument. Elsewhere, the UAE and Saudi Energy Ministers were on the wires this morning with the former suggesting that the crude market is balanced, and prices could double or triple in a “chaotic” market. WTI and Brent front-month futures saw some recent pressure in what coincided with the mixed Germany ZEW reports alongside the aforementioned commentary from Hungary. WTI June resides around USD 102/bbl (vs high ~USD 104/bbl) and Brent July around 105/bbl (vs high 107/bbl). Elsewhere, spot gold holds onto mild gains as DXY pulled back from the fresh YTD highs set yesterday, with the yellow metal around USD 1,860/oz after failing to top its 100 DMA (today at 1,884.50/oz) in yesterday’s session. LME futures post mild gains following yesterday’s downside with the market still looking somewhat fragile.

10 May 2022 - 10:44- EnergyResearch Sheet- Source: Newsquawk