EUROPEAN COMMODITY UPDATE: Crude contained amid two-way factors while metals cheer China’s return

Analysis details (10:00)

WTI and Brent are bolstered this morning amid broader risk-on action, the easing of China’s COVID restrictions and perhaps from some geopolitical premia, regarding China and North Korea. Currently, oil benchmarks are firmer by just shy of USD 1.00/bbl, at USD 119.50/bbl and USD 120.50/bbl respectively, but have been traversing sideways since the arrival of European participants given the lack of fresh news flow. Overnight developments, and bullish factors, include the further easing of China’s COVID restrictions, North Korea firing eight short-range missiles which prompted a response from the US and South Korea. Additionally, China’s relationship with Australia remains tense with fresh issues emerging over an interaction between the respective nation’s fighter jets. Elsewhere, Saudi has made incrementally larger than expected increases to its OSPs, further underpinning price action. However, offsetting this is the partial resumption of Libya’s El Sharara site following protest activity; albeit, the resumption is at 180k BPD vs its 330k BPD production capacity. Moving to metals, spot gold is little changed and holding around the USD 1850/oz mark and just below the 10-DMA at USD 1,853/oz. Elsewhere, more notable price action is being seen in base metals with LME Copper, for instance, bid in excess of 2.0% as Chinese participants return from Friday’s holiday and cheer the elevated PMIs and easing of restrictions.

06 Jun 2022 - 10:00- MetalsResearch Sheet- Source: Newsquawk