EUROPEAN COMMODITIES UPDATE: Sentiment drives crude while gold flatlines awaiting the next major catalyst

Analysis details (09:40)

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  WTI and Brent June futures are off worst levels but ultimately softer intraday, as the complex moves in tandem with the broader risk sentiment – which has held a downward bias since APAC hours. WTI has trimmed losses to move back towards USD 77.42/bbl from a current USD 76.42/bbl intraday low (and a USD 77.98/bbl peak), while its Brent counterpart reclaimed USD 81/bbl status in recent trade after printing a USD 80.48/bbl intraday trough thus far (and a USD 81.87/bbl peak). Brent settled lower last week for the first time since mid-March, according to ING, with the desk also citing demand worries and pressured refinery margin translating some weakness. Crude-specific newsflow has been light thus far, although Iran raised its May OSP to Asia by USD 0.3/bbl M/M. Elsewhere, the German Ifo survey was rather mixed but highlighted that “strong economies” in China and the US seem to be supporting German industry. Over to geopolitics, Chinese State Councilor and Foreign Minister Qin Gang on Monday met with Russian First Deputy Foreign Minister Vladimir Titov in Beijing, according to China News. Ahead, the session is scattered with ECB speakers, while Fed officials are observing the blackout period as next week’s FOMC looms. Price action today could be dictated by broader risk sentiment, with the complex trimming losses at the same time as equities in the early European hours of Monday. Nat Gas futures on both sides of the pond meanwhile hold a modest downward bias – in fitting with broader energy price action.


• Over to metals, spot gold trades horizontally after finding some resistance around USD 1,985/oz overnight, with the yellow metal sandwiched to a USD 10/oz parameter amid a lack of clear catalysts but ahead of this week’s risk events including US data and the BoJ. Weekend reports via the FT suggested central bankers are loading up on gold amid rising geopolitical tensions, with the amount of gold bought by central banks in 2022 rising 152% Y/Y, according to the article citing the World Council Body. Base metals are mostly lower, although LME copper remains cushioned despite the broader subdued mood across markets. ING points to reports that Codelco’s copper operations have been disrupted amid ongoing protests in the region. Access to four mines has reportedly been blocked since the early hours of Friday.

24 Apr 2023 - 09:40- MetalsEU Research- Source: Newsquawk