EUROPEAN COMMODITIES UPDATE: Firmer Dollar caps gains for most commodities, but copper and iron buck the trend

Analysis details (10:29)

WTI and Brent front-month futures are modestly softer after settling higher by over USD 4.00/bbl and USD 3.50/bbl respectively on Friday as the complex felt tailwinds from the OPEC+ decision in the middle of last week. This morning, prices see upside capped the downbeat mood across markets and the firmer Dollar, whilst the Russia-Ukraine conflict intensifies with explosions reported across several large Ukrainian cities including the capital Kyiv. China’s COVID situation remains a dark cloud over the demand side of the equation in the run-up to the CCP National Congress on Sunday as officials attempt to contain COVID outbreaks heading into the event - China's Shanghai requires arrivals to take three COVID tests within three days, according to Bloomberg. WTI Nov’22 oscillates on either side of USD 92/bbl (91.64-93.55 range) while Brent Dec’22 resides around USD 97/bbl (96.85-98.75 range). Desks also flag the tightening middle distillate markets, with the latest move being attributed to strike action across France – “Strike action along with some other outages means that over 60% of French refining capacity is offline at the moment”, according to ING, with strike action continuing on Monday. Over to metals, spot gold has been ebbing lower in tandem with strength in the DXY, with the yellow metal’s 21 DMA (1,678/oz) matching the current intraday low. Base metals see mixed trade with LME copper on a firmer footing with Chile permanently closing mining areas connected to a large sinkhole, whilst iron ore futures rose in China alongside reports that Kumba Iron Ore, the fourth largest iron-ore producer in the world, declared a force majeure due to strike action - export sales will be impacted by around 120k tonnes per day.

10 Oct 2022 - 10:28- Research Sheet- Source: Newsquawk