EUROPEAN COMMODITIES UPDATES: Crude remains underpinned whilst metals drift higher as DXY pulls back from highs and sentiment stabilises
Analysis details (10:10)
- WTI August and Brent September futures are somewhat resilient despite the firmer Dollar and broader but mild risk aversion at the time heading into the US jobs report. Crude prices are seemingly underpinned by this week’s OPEC+ developments, whereby Saudi extended its voluntary cuts for a month, Russia committed to more production cuts and export cuts, whilst Algeria also joined in on the action with a modest voluntary reduction. Add to that, Saudi raised its Official Selling Prices (OSPs) across all regions, although reports via Bloomberg suggested some key purchasers of Saudi Arabia's crude in Asia and Europe are seeking lower volumes for next month after the kingdom hiked official prices and extended output cut. Furthermore, the supply-side development also saw large drawdowns in this week’s inventory data, which further adds a cushion to prices. That being said, the opposing forces include fears of growth slowdown or no growth across some major economies, coupled with higher interest rates for longer, which dents the demand side of the equation. Aside from that, newsflow this morning for crude has been quiet. WTI resides around the USD 72.00/bbl mark (USD 71.69-72.40/bbl) while Brent sits under USD 77/bbl (USD 76.38-77.10/bbl).
- Over to metals, spot gold has been drifting higher with some potential haven bid, as sentiment remains downbeat in the run-up to the US jobs data, albeit the yellow metal resides within recent ranges around the USD 1,915/oz region. Base metals are mixed and have recouped overnight losses as the DXY pulls back a touch as risk sentiment somewhat stabilises in the absence of catalysts ahead of NFP. 3M LME copper briefly dipped under US 8,250/t before reclaiming a USD 8,300/t handle.
07 Jul 2023 - 10:10- MetalsResearch Sheet- Source: Newquawk
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