EUROPEAN COMMODITIES UPDATE: Curtailed amid COVID-driven risk aversion and continuing USD advances
Analysis details (10:45)
Crude benchmarks are under pressure once again as the demand-side of the equation remains bleak amid China’s lockdown a key steel/iron hub after just one COVID case was reported. WTI and Brent are in proximity to session troughs of USD 101.06/bbl and USD 104.35/bbl respectively. News flow has been fairly limited in terms of crude specifics, though macro developments have been pertinent. Aside from the aforementioned COVID update, the German/EZ ZEW release for July made for dismal reading, with the headlines notably missing expectations, while accompanying commentary was downbeat; the ZEW said that the outlook had deteriorated, and the current economic situation was “significantly more negative” M/M; as such, ZEW cut its 6-month forecasts once again. (Note, this release would not have included the most recent negative China COVID developments.) For the session ahead, the OPEC MOMR is due at 12:10BST/07:10ET where participants will be focused for the first look at the 2023 demand situation; for reference the EIA in June projected 2023 world oil demand of 101.32mln BPD; earlier in June reports suggested that OPEC’s first forecast for 2023 would show world oil demand growth slowing in 2023 amid surging prices. Turning to metals, spot gold is relatively resilient despite broader price action, and the yellow metal is torn between COVID-driven haven allure and the USD’s ongoing advances. The broader metal space suffers given the performance of China and as the USD remains elevated, with particular focus on updates to steel/iron out of China – given the locked-down city is of note for the industry.
12 Jul 2022 - 10:45- EnergyData- Source: Newsquawk
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