EUROPEAN COMMODITIES UPDATE: Digesting OPEC+ larger than expected supply increase and tariff updates

WTI/Brent: -0.1%/+0.5%

• Subdued trade across the crude complex after OPEC+ agreed to raise supply by 548k BPD in August, exceeding expectations of a 411k BPD increase.


• Most recently, Reuters sources said OPEC+ will “likely" approve another output increase of around 550k BPD for September, completing the return of 2.17mln BPD in voluntary output cuts. These sources align with Goldman Sachs prediction of a 550k BPD increase at the August meeting for September. This news pressured benchmarks, though they remained within the day’s range of USD 67.22-68.70/bbl for Brent.


• Since, a bounce has been seen in the complex, enough to take Brent to a USD 68.70/bbl high and WTI to just above USD 67.00/bbl; no clear fundamental driver behind the move.


• Additionally of note, Saudi Arabia raised its August OSPs to USD 2.20/bbl above average Oman/Dubai crude (+USD 1/bbl from July), signalling confidence in the market despite the OPEC+ decision. It was previously expected, according to a Reuters survey, that the light OSP would rise 50-80 cents vs July.


• In terms of commentary surrounding this, RBC said the decision will bring nearly 80% of the 2.2mln/BPD voluntary cuts from eight OPEC producers back into the market.


• Following the OPEC+ decision, GS maintains its avg. Brent price forecast of USD 59/bbl in Q4, and USD 56/bbl in 2026.


• On the trade front, and another layer of uncertainty, US President Trump said trade letters are set to be sent out to 12 countries on Monday, from midday Eastern time, or 17:00 BST.

Gold: -0.8%

• Trade in focus, the top-line overview is that the US is set to send letters outlining terms of trade to around 15 nations today and then more over the next few days. Alongside this, it appears as if the July 9th tariff date has been pushed to August 1st; though, when journalists sought clarification from Trump his response added little.


• XAU under pressure throughout the morning, hit by the USD strength on the day’s upcoming trade updates and as Trump announced a new 10% tariff level on “Any Country aligning themselves with the Anti-American policies of BRICS…”.


• XAU down to USD 3300/oz at worst, but is currently holding modestly off that low. A base that takes XAU back to support from the last few weeks at USD 3255/oz and USD 3246/oz.

Copper: -0.8%

• Hit by the tepid risk tone, US equity futures are lower, while European ones are mixed but struggling to make any substantial headway given the tariff uncertainty.


• Furthermore, the discussed USD strength is another headwind for the complex which was unable to benefit from China announcing support overnight, as the measures were targeted at the services sector.


• 3M LME Copper is under pressure, drifting further from the USD 10k mark it reclaimed on July 1st, hit a three-month peak at USD 10.02k in the following session and since has been on a downward trajectory. Today, as low as USD 9.77k. The next point to watch is USD 9.917k from June 26th.

07 Jul 2025 - 09:55- ForexGeopolitical- Source: Newsquawk