EUROPEAN COMMODITIES UPDATE: Industrial commodities rebound while gold trades flat and silver slips

Analysis details (10:00)

• WTI Dec and Brent Jan future rebounded from session lows shortly after the European cash open to trade closer to flat levels around USD 77.00/bbl (vs low USD 76.21/bbl) and USD 81.25/bbl (vs low 80.41/bbl), although both contracts are still below the session's highs of USD 77.28/bbl and USD 81.53/bbl seen at the resumption of electronic trade overnight. Headlines for the complex have been abundant over the weekend, but quieter in European trade, with the sudden rebound in prices also coinciding with late gains in Chinese markets and extended gains in European stock markets, although US futures remain subdued at the time of writing. On the geopolitical front, the Israeli-Hamas war continues with Lebanon also firing a barrage of rockets today, whilst Politico reported the EU is said to be discussing ramping up sanctions against Iran over its support for Hamas – although there is a split among diplomats and the sanctions will likely target the export of components used in missile production. Elsewhere, weekend reports suggested Poland deployed a tank battalion near the border with Belarus – a move which Russia's Kremlin said would escalate tensions. Further east, South Korea and the US have revised their deterrence strategy and boosted drills in a bid to deter North Korea's advancing nuclear and missile threats. On the supply front, on Sunday the Iraqi oil minister said he expects to reach an agreement within three days with the Kurdistan Regional Government to resume production from Kurdish oilfields which comes after Turkey halted 450k BPD of northern exports from the Iraq-Turkey pipeline from March 25th earlier this year following an arbitration ruling. Sticking with energy supply, Chevron (CVX) confirmed that it was instructed by Israel's Ministry of Energy to resume energy production at the Tamar Natgas production platform. Ahead, participants today will be eyeing the OPEC Monthly Oil Market Report (12:00GMT/07:00EST), although the report is backwards-looking in a fluid market, whilst the IEA’s OMR will be released tomorrow. Traders are also cognizant of upcoming risk events this week including US CPI tomorrow, Chinese activity data and the Biden-Xi meeting on Wednesday, and the US government shutdown deadline on Friday.


• Metals are mixed with spot gold flat and not far above Friday’s trough of USD 1,933/oz and within a USD 10/oz intraday range as the yellow metal awaits the US CPI on Tuesday followed by several risk events throughout the week. Spot silver meanwhile is losing ground -0.9% intraday after briefly dipping under the USD 22/oz mark overnight and in recent trade. On the flip side, base metals are firmer with strength seen in the copper futures and iron ore futures overnight, with the 3M LME copper contract around USD 100/t off its worst levels after dipping to a USD 8,036/oz low overnight. Iron ore meanwhile climbed over 1.5% on the Dalian exchange whilst rising some 1.0% in Singapore – with participants citing Chinese property sector optimism. Elsewhere and of note for the nickel watchers, Reuters sources over the weekend reported that the US and Indonesia are discussing a potential deal aimed at boosting the trade of nickel between the two nations, although a source added that there is a lot of work left to do before a deal is announced.

13 Nov 2023 - 10:03- Research Sheet- Source: Newsquawk