EUROPEAN COMMODITIES UPDATE: Modest gains for energy benchmarks in light pre-NFP/ISM newsflow

Analysis details (10:35)

• Crude benchmarks are in the green but only modestly so and taking impetus from the USD rather than any specific crude driver with the overall tone tentative pre-NFP. Dutch TTF has pared back to near the unchanged mark after initial gains as Chevron workers rejected the first mediation package ahead of potential strikes on September 7th. In terms of metals, spot gold is at the top-end of parameters but as above this is relatively modest with specifics light while base metals have returned firmly to the green as China unveils further stimulus.


• WTI Oct’23 and Brent Nov’23 are in the green, with upside of circa. USD 0.40/bbl, continuing the positive move from Thursday where the benchmarks settled firmer by around USD 2.00/bbl. The benchmarks are currently at WTD peaks of USD 84.15/bbl and USD 87.34/bbl respectively, but remain shy of August’s USD 84.89/bbl and USD 88.06/bbl best. Newsflow for the space has been limited as Idalia moves further inland and the BSEE are yet to update on any outages from the Hurricane as the sights that reduced workers begin to return them to platforms. More broadly, the complex is attentive to an EU draft document cited by Reuters which states EU nations are seeking a deal on phasing out fossil fuels at the COP28 summit, which occurs between 30th November and 12th December.


• Turning to gas, Dutch TTF and US Nat Gas were initially bolstered by Chevron’s Australian LNG workers announcing they are to reject the first bargaining offer. Since, Reuters source reports indicate that the Co. and unions are to meet for mediation discussions next week. As a reminder, the current industrial action plan could result in tools being downed for up to 11 hours and the halt of certain talks from September 7th until at least the 14th.


• Moving to metals, spot gold is incrementally firmer at the top-end of narrow USD 1938-1944/oz parameters with specific newsflow limited and the slight bid resulting from USD weakness and the broader tone pre-NFP/ISM. Elsewhere, base metals glean support from the latest measures by China to support the economy with particular emphasis on the property sector. For copper specifically, it is worth keeping an eye on Aurubis’ altering that it has been the victim of a “criminal activity” after identifying discrepancies in the stockpiles and shipments of metal tied to its recycling business; a development which is of note for the broader copper market given Aurubis’ status as the largest European smelter.

01 Sep 2023 - 10:32- Research Sheet- Source: Newsquawk