EUROPEAN COMMODITIES UPDATE: Crude holds as the OPEC Seminar's second day gets underway, gold trades with the Dollar, and base metals slip on growth woes

Analysis details (09:35)

• WTI and Brent front-month futures are flat intraday but have been choppy within tight ranges since the resumption of futures trading overnight, as tailwinds from recent Saudi jawboning and a larger-than-expected draw in private sector crude inventories were offset by the mostly downbeat overnight risk sentiment. Yesterday, the Private Inventory data printed at -4.4mln (vs exp. -1.8mln), although the internals were bearish – Gasoline +1.6mln (exp. -1.1mln) and Distillates +0.6mln (exp. +0.5mln). Participants will be looking ahead to the weekly DoEs later today – delayed on account of the US Independence Day holiday on Monday. 


• Traders today will also be keeping an eye on the second day of the OPEC Seminar which will see comments from the UAE Energy Minister later. According to reports yesterday. OPEC energy and oil ministers met on the sidelines of the 8th OPEC Seminar and reviewed market conditions, while they agreed to continue consultation with their non-OPEC counterparts in continued efforts to support a stable and balanced oil market, according to a statement. OPEC Secretary General said OPEC is in discussions with Azerbaijan, Malaysia, Brunei, and Mexico to join the group, while OPEC invited Azerbaijan to join the organisation, although Azerbaijan's Energy Minister said the country is currently not considering joining OPEC after an invite from the cartel, according to Interfax. Kuwait's minister denied that Kuwait is requesting an OPEC+ quota increase and said the country's oil output capacity will be 3.2m BPD by the end of 2024. WTI August remains under USD 72/bbl while Brent September sits just under USD 76.50/bbl at the time of writing.


• Elsewhere, spot gold trades in tandem with the Dollar, with the yellow metal printing a session peak at USD 1,921/oz at a time DXY resided around session lows. Gold traders today will be keeping an eye on Dollar movements for influence in the run-up to tomorrow’s US jobs report, with today’s data including the US ADP Employment, ISM Services, and weekly Jobless claims.


• Over to base metals, the complex is softer across the board owing to losses to growth concerns which reverberated through global markets. 3M LME copper trades on either side of USD 8,250/t having printed a high closer to USD 8,350/t. Sticking with copper, it was reported that Chile's Codelco estimated copper production loss of about 7k tons due to recent rains and it is seen ending 2023 with production at the low end of the estimated 1.35mln-1.42mln tons range but noted that production will start recovering next year. Furthermore, it was reported that Chile Codelco copper output in May fell 22.4% Y/Y to 110.9k tonnes and Escondida copper mine production fell 21.5% to 83.9k tonnes, while Collahuasi copper mine production fell 11.8% to 43.2k tonnes, according to Reuters.

06 Jul 2023 - 09:35- Research Sheet- Source: Newsquawk