EUROPEAN COMMODOTIES UPDATE: Crude lower but off worst levels on reports that Trump asked if Ukraine are able to hit Moscow with US weapons

WTI/Brent: -0.5%/-0.4%

• WTI and Brent are currently lower by around USD 0.40/bbl and USD 0.30/bbl respectively; price action overnight was rangebound, which has continued into the European morning. Newsflow this morning has been fairly light; there have been reports of a drone attack in Iran’s Kurdistan region which has halted production at the Sarsang oilfield (80k BPD). In recent trade, the FT reported that US President Trump reportedly asked Ukraine's Zelenskiy if Ukraine could hit Moscow if the US provided them with long-range weapons; the Ukrainian President replied with "absolutely...". This sparked some modest upside in the complex, albeit within earlier ranges. Brent Sept’25 currently trades in the red but towards the upper end of a USD 68.60-69.17/bbl range.


• The complex was briefly lifted after US President Trump announced 100% tariffs on Russia and secondary sanctions on other countries that buy oil from Russia if a Ukraine deal is not struck within 50 days. However, the complex soon slipped, likely as markets digested the lack of immediate action from the President.


• Nonetheless, in the event that a deal cannot be brokered – ING writes that the effects of such a tariff implementation could push the global market “into a large deficit”, adding that OPEC’s spare capacity would not be able to fill the shortfall. However, Trump pre- and post-election has called for lower oil prices, and such a move would work against this goal.


• Elsewhere, the EU is said to be close to reaching an agreement for a new sanction package against Russia. This takes aim at Russia’s energy revenue, banks and military industry and so may only have a limited impact on gas markets specifically, but some volatility can be expected. Dutch TTF currently trades in a EUR 34.75-35.35/MWh range.


• Docket today is headlined by US CPI; the consensus expects US CPI to rise by 0.3% M/M in June, picking up in pace vs the +0.1% in May; the annual rate is expected to rise to 2.7% Y/Y from 2.4% in May. The core rate of CPI is also expected to rise by +0.3% M/M in June after the +0.1% in May, and the annual rate is seen picking up to 3.0% Y/Y from 2.8%. Also on the docket is the OPEC Monthly Oil Market Report; as a reminder, last week the IEA trimmed its 2025 and 2026 world demand growth forecast.

Gold: +0.6%

• Precious metals are mixed, with slight gains seen in spot Silver/Gold whilst Palladium is a little lower. The yellow-metal currently trades towards the upper end of a USD 3,341.55-3,365.72/oz range, but with price action fairly muted ahead of US CPI.


• Analyst notes: GS wrote that the May reading of its “nowcast central bank and institutional gold demand” on London OTC market came in at 31 tonnes vs pre-2022 avg. of 17 tonnes. Elsewhere, UBS outlines that it favours allocations into gold to diversify against geopolitical/political risk, given the Dollar’s “safe haven” status has not been so clear in recent months.


• From a technical standpoint, spot gold trades just above its 21 DMA (3,338.62) and its 50 DMA (3,324) which continues to indicate a bullish bias. Analyst Chai at RHB Research believes further consolidation at current levels could set up a push for the USD 3,450/oz mark.

3M LME Copper: -0.1%

• Base metals hold a negative bias, with incremental losses seen in 3M LME Copper prices as trades digest the latest Chinese GDP and activity metrics.


• China’s GDP grew 5.2% Y/Y in Q2 (exp. 5.00%), topping the consensus view, but slower than Q1’s 5.4%, supported by strong exports and manufacturing subsidies; the growth keeps China on track to meet its FY target of around 5%, reports said.


• More specifically for 3M LME Copper, requests from LME warehouses dropped by 25,100 tonnes to 15,875 tonnes, as US buyers now look to work through their own inventories ahead of Trump’s 50% tariff implementation.


• 3M LME Copper trades towards the mid-point of a narrow USD 9,602.33-9,656.5/t range.

15 Jul 2025 - 10:20- ForexGeopolitical- Source: Newsquawk