EUROPEAN COMMODITIES UPDATE: Oil and industrial metals pressured by lingering growth concerns alongside a firmer Dollar

Analysis details (09:49)

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  WTI and Brent futures have erased the modest gains seen overnight in light of the German GDP metrics, which saw Europe’s largest economy stagnating Q/Q in Q1. “Today’s data shows that the warm winter weather, a rebound in industrial activity, helped by the Chinese reopening and an easing of supply chain frictions were not enough to get the economy out of the recessionary danger zone. Private consumption continues to suffer from still-high retail energy prices”, says ING, adding that “looking into the second half of the year, the German economy will continue its flirtation with recession.” Growth concerns remain a headwind for the complex which ultimately leads to lower demand. Crude futures posted gains overnight after settling modestly higher during the US session. The APAC gains were owed to the positive risk tone at the time, while complex-specific newsflow has been light this morning. WTI June has fallen back to USD 74.50/bbl (vs high 75.51/bbl) while Brent July dipped under USD 78/bbl (vs high USD 79.06/bbl). Natural gas futures are mixed with US Henry Hub on a softer footing, down some 1.2% at the time of writing whilst Dutch TTF sees gains of some 1.6% back above EUR 40/MWh – RWE’s CEO said the energy crisis in Europe is not over yet and does not wish to operate coal-fired power stations from security reserves for longer than necessary.


• The metals complex sees broader pressure from a firmer Dollar. Spot gold remains under USD 2,000/oz but within yesterday’s USD 1,974.11-2,003.42/oz parameter ahead of US Core PCE later today – which will be the last set of Tier 1 data before next week’s FOMC. Base metals are mostly lower amid the downbeat risk done and the aforementioned firmer Dollar – 3M LME copper eyes USD 8,500/t to the downside (vs high USD 8,638/oz) with growth concerns lingering in Europe.

28 Apr 2023 - 09:50- MetalsEU Research- Source: Newsquawk