EUROPEAN COMMODITIES UPDATE: Currently taking cues from risk, though OPEC+ will take centre stage shortly

Analysis details (10:40)

• Crude benchmarks are modestly softer taking impetus from the broader risk tone after yesterday’s generally constructive price action, much of which was put down to increasing factors in favour of a Fed ‘pivot’; on which, today’s data docket will be influential before NFP.


• While WTI and Brent are deriving direction from equities and similar, attention will shortly turn to the OPEC meeting which commences with the JMMC around 12:00BST and the OPEC+ gathering around one-hour later, timings for guidance only as usual.


• As it stands, consensus heading into it is that there will be a sizeable production cut announced, the magnitude of which is unknown but source updates are becoming increasingly skewed towards the top-end of a 0.5-2.0mln range. After the magnitude, attention turns to whether it is based on targeted quotas or current production, the timeline alongside the economic justification that the members outline in any potential follow up press conference. Full newsquawk preview available here.


• In terms of the morning’s price action, the benchmarks have been contained within narrow ranges of around USD 1.00/bbl and are, broadly speaking, moving in tandem directionally with the equity complex.


• Moving to metals, spot gold is once again moving at the whim of the USD which has continued to firm throughout the morning and thus the yellow metal has been pushed back to the USD 1710/oz mark and away from the 50-DMA it tested yesterday at USD 1723/oz. Base metals are generally in-fitting with this, evidenced by LME copper pushed back below USD 7.7k. Elsewhere, Commerzbank expects gold to end 2022 at USD 1,700/oz (prev. view of USD 1,800/oz) and 2023 at USD 1,800/oz (prev. view of USD 1,900/oz).

05 Oct 2022 - 10:40- MetalsEU Research- Source: Newsquawk