EUROPEAN COMMODITIES UPDATE: Generally contained trade though Khamenei drove a modest crude bid

Analysis details (09:40)

• Commodities have, broadly speaking, spent the bulk of the European morning fairly contained with fresh catalysts limited ahead of a particularly busy US agenda headlined by Quarterly Refunding & the FOMC.


• For crude, the benchmarks are a touch firmer but remain well within recent ranges as the pace of geopolitical news slows a touch ahead of key risk events. The sessions current peaks of USD 81.85/bbl and USD 85.88/bbl for WTI Dec’23 and Brent Jan’24 respectively printed in the wake of remarks from Iran’s Supreme Leader. Khamenei called for Muslim countries to stop exporting oil to Israel, a request which reiterates a speech from October 18th in which Khamenei called for neighbouring nations to impose an oil embargo on Israel alongside the expulsion of Israeli ambassadors. Iran aside, the main geopolitical update of the morning has been the opening of the Rafah border crossing into Egypt. An opening that is for foreign nationals and those with severe injuries, in terms of the scale of the crossing an Egyptian official said around 500 foreign nationals can be expected to cross into Egypt today; as it stands, it is unclear as to how long the crossing will remain open for.


• Tuesday’s Private Inventory release saw an as-expected headline crude build of 1.3mln while the internals were slightly more bullish than forecast. Overall, there was no particularly pronounced or sustained market reaction to the release which comes ahead of the EIA numbers today where a headline build of 1.6mln is forecast.


• Moving to metals, spot gold is essentially unchanged in relatively contained USD 1975-1986/oz parameters as participants await the aforementioned key US events. Action which keeps the yellow metal at the low-end of WTD parameters but still within sight of the USD 2k handle and the recent USD 2009/oz peak from October 27th. Elsewhere, base metals are similarly contained but with a slight negative bias owing to the deterioration in the broader risk tone throughout the European morning from an equity perspective and in the wake of disappointing Chinese PMIs

01 Nov 2023 - 09:32- Research Sheet- Source: Newsquawk