EUROPEAN COMMODITIES UPDATE: Oil pulls back as traders brace for tomorrow's NFP and this weekend's OPEC meeting

Crude Oil: WTI Oct -1.0% Brent Nov -1.0%

• Crude remains subdued after declining yesterday on OPEC+ headlines with the group reportedly mulling another oil production hike at Sunday’s meeting but with the decision not yet made. That being said, prices this morning found a floor after Russian Deputy PM Novak clarified OPEC-8 are not discussing production increase now, and no agenda has been set for the upcoming OPEC+ meeting yet. Novak added current market conditions and forecasts are to be considered.


• As a reminder, OPEC-8 (Saudi Arabia, Iraq, Kuwait, Russia, the UAE, Algeria, Oman and Kazakhstan) will meet on Sunday 7th September to possibly discuss starting the unwind of the 1.65mln BPD tranche of cuts, marking a shift from plans to keep the curbs of this tranche until end-2026. At the prior meeting in August, OPEC-8 completed the return, a year ahead of schedule, of the 2.2mln BPD tranche of production shuttered in 2023 - this was done with a final 547k BPD hike for September for that tranche.


• It's worth noting that members are to conduct a call on Saturday to discuss options, thus all sources beforehand are to be taken with a pinch of salt. Note, for the upcoming meeting this is not the full ministerial meeting (slated for November 30th), but will still be a policy-setting or "live" meeting.


• It was also reported this morning that OPEC+ could weigh a 12-month phase-out of the cut, delegate sources told Argus, implying monthly increments of about 137k BPD. Should this go ahead they expect a cautious approach, maintaining the flexibility to increase, pause, reduce or even reverse policy.


• Overnight, prices were not helped by mixed private sector inventory data which showed a surprise build in headline crude stockpiles; US Private Energy Inventories (bbls): Crude +0.6mln (exp. -2mln), Distillates +3.7mln (exp. -0.6mln), Gasoline -4.6mln (exp. -1.1mln), Cushing +2.1mln.


• In geopolitics, it was reported earlier that "The "Gideon 2 vehicles" operation in Gaza may extend to a full year", via Sky News Arabia citing Yedioth Ahronoth's Israeli miliary sources. The "Gideon 2 vehicles" operation is the Israeli plan to occupy and take control of Gaza city.


• WTI currently resides in a 63.05-63.84/bbl range while Brent sits in a USD 66.67-67.41/bbl range.

Precious Metals: Gold -0.7%, Silver -0.5%, Palladium -1.0%

• Softer trade across the board for precious metals despite a lack of fresh catalysts but with some possible profit-taking ahead of tomorrow's jobs report.


• Overnight, spot gold pulled back from the prior day's fresh record highs after benefitting from a weaker dollar and dovish tailwinds.


• Spot gold resides in a USD 3,511-3,564.15/oz range at the time of writing, with the next upside level being yesterday's peak at USD 3,578.66/oz.

Base Metals: 3M LME Copper -0.8%

• Lower across the board despite a relatively rangebound dollar and mixed risk sentiment, although Chinese markets traded with low spirit overnight which could explain the similar sentiment in industrial commodities.


• That being said, Dalian iron ore bucked the trend overnight with the front-month contract ending the session +1.7% on a rosier demand prospect for the metal after the steel production resumption, following the Chinese military parade, fuelled prices.


• 3M LME copper moves further under USD 10k after recently topping the level. The contract currently resides in a USD 9,896.35-9,981.30/t parameter.

04 Sep 2025 - 10:20- MetalsEU Research- Source: Newsquawk