EUROPEAN COMMODITIES UPDATE: USD and risk supports gold while crude remains rangebound

Analysis details (10:55)

• Crude benchmarks are little changed this morning despite a choppy start to the week on Monday with catalysts thin thus far. Spot gold is deriving some incremental support from the softer USD and tentative risk tone, though action is very much in a holding pattern before US earnings and data thereafter.


• Thus far, crude specifics have been particularly light with the only update of note emanating from Kazakhstan’s KazMunayGas which reports that all three oil refineries are operating normally, following the power outage at the beginning of July, via Tass. Elsewhere, the pre-release factors for TotalEnergies upcoming results highlight their Q2 hydrocarbon production is seen at 2.5mln BOEPD in Q2, -50k QQ; mainly due to planned maintenance in the North Sea.


• Given the comparatively light newsflow, the current sessions range is relatively contained and under USD 1/bbl with WTI and Brent Sep’23 towards the top-end of USD 73.88-74.51/bbl and USD 78.19-78.83/bbl respective ranges; parameters which are markedly shy of Monday’s respective USD 76.09/bbl and USD 80.64/bbl highs.


• Moving to metals, spot gold is bid this morning with both the USD downside and tentative risk tone serving as bullish factors in European hours; though, looming earnings and US retail data could see a shift in the risk tone. Currently, the yellow metal is at the top-end of USD 1954-1964/oz bounds and as such has lifted above a cluster of DMAs between USD 1951-56/oz. Elsewhere, base metals are pressured in a continuation of the China story and despite a number of support measures being flagged in APAC trade for the region; albeit, the magnitude is not too pronounced thus far with the USD’s downside offsetting some pressure.

18 Jul 2023 - 10:45- Research Sheet- Source: Newsquawk