EUROPEAN COMMODITIES UPDATE: Pressured amid risk & USD action

Analysis details (10:20)

Commodities are broadly under pressure amid a general risk-tone and as the USD continues to climb; fresh updates have been limited. Following Wednesday’s price action, Goldman Sachs has updated its adverse-scenario fair-value prices for Brent to USD 124/bbl (prev. 135/bbl) in H2 and USD 108/bbl (prev. USD 125/bbl) in 2023. However, the bank reiterates its view that the skew to prices from current levels is to the upside; low liquidity and technicals have exacerbated the downside move earlier in the week, and their view is maintained in-light of record inventories and headwinds to spare capacity. Currently, WTI and Brent are at troughs of USD 93.46/bbl and USD 97.20/bbl respectively. Futurestech has highlighted USD 93.30/92.93 and USD 96.96/96.73 as the next pertinent respective support levels. In metals, the complex is also dented on the USD moves, and that has sent spot gold back within reach of yesterday’s sub-USD 1,710/oz trough, as the yellow metal is unable to derive sufficient safe-haven allure amid FX action. Elsewhere, Bloomberg reports that China is said to be considering ending the Australian coal ban due to Russian supply fears, a report that echoes a similar unconfirmed update in Wednesday’s session via sxcoal; in wake of this, the AUD appreciated notably while base-metals broadly remain pressured.

14 Jul 2022 - 10:20- MetalsResearch Sheet- Source: Newsquawk