EUROPEAN COMMODITY UPDATE: Crude awaits a JCPOA response, USD weighs across the board

Analysis details (10:45)

• The crude complex has commenced the last session of the week under pressure, amid further JCPOA developments and USD strength.


• Currently, the October benchmarks are lower by just shy of USD 1.00/bbl and in relative proximity to the session’s trough of USD 88.62/bbl in WTI Oct’22, for instance. Action that pales in comparison to the week’s USD 7.00/bbl range, the bulk of which printed on Monday amid the initial EU and Iranian nuclear developments. On this, Iranian International English reports that a list of concessions the US has agreed to is currently circulating within the Iranian administration, and indicates a deal could be implemented in 120 days. Since then, developments have been limited but WSJ’s Norman points out that a reasonable, but unconfirmed, assumption would be for the US to respond to any concerns today; however, this means we are unlikely to get a follow up response from Iran before Monday, at the earliest.


• In terms of the Dollar, that continues to derive support from hawkish rhetoric and associated yield dynamics, upside that is once again exerting some pressure on the yellow metal. Albeit, spot gold is only USD 5/oz softer (vs circa. USD 50/oz weekly range) and posting action which is in-fitting with the broader metals complex in very limited newsflow with a sparse docket ahead. For reference, Shanghai base metals experienced a softer end to the week amid the strong USD and growth concerns outweighing any potential support from reduced levels of supply; note, broader Chinese industry has been affected by power reductions in areas including Sichuan as part of a bid to prevent residential outages, reductions that are expected to conclude this week.

19 Aug 2022 - 10:45- Research Sheet- Source: Newsquawk