EUROPEAN COMMODITIES UPDATE: Monday’s Dollar spike keeps commodities under pressure in quiet Tuesday trade

Analysis details (09:30)

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  WTI Nov and Brent Dec futures are softer in a continuation of the weakness seen yesterday which ultimately saw the former settle lower by USD 1.97/bbl while the latter settled with losses of USD 1.49/bbl amid a spike in the Buck and risk aversion Monday. Desks suggest the “higher-for-longer” narrative is reverberating across the market, with eyes now turning to tomorrow’s OPEC+ JMMC meeting, in which policy change recommendations are not expected, while Saudi and Russia are also seen maintaining their voluntary curbs at current levels. The meeting is part of routine confabs to evaluate market fundamentals. Saudi Arabia, earlier in September, suggested voluntary cut decisions will be reviewed monthly where they will consider deepening the reduction or increasing production (Full Primer on the Newsquawk headline feed). Away from OPEC, markets are also waiting for clarity on the Northern Iraqi oil flows through the Ceyhan pipeline, with Turkey suggesting flows could resume this week, while Iraqi officials poured cold water on the news, clarifying that some issues still need to be resolved. WTI remains sub-89/bbl (USD 87.76-88.71/bbl range) while Brent oscillates around USD 90/bbl (USD 89.50-90.46/bbl range). The market will likely be influenced by broader market sentiment in the absence of other catalysts in what looks to be a quiet session in terms of scheduled events.


• Over to metals, spot gold is flat intraday on either side of USD 1,825/oz after falling to a session low of USD 1,815/oz before regaining some poised in what looks to be a Dollar story, with the next level to the downside being the 9th March low at USD 1,811.98/oz. “The higher-for-longer narrative has been putting significant pressure on gold, which is leading to a significant reduction in investment appetite reflected by the large declines in gold ETF holdings in recent months. Fed policy will remain key to the outlook for gold prices in the months ahead”, says ING. Base metals are off their worst levels as the Dollar eases from highs, with 3M LME copper back on a USD 8,000/t handle after falling as low as USD 7,956.50/t in early European hours.

03 Oct 2023 - 09:33- MetalsResearch Sheet- Source: Newsquawk