EUROPEAN COMMODITIES UPDATE: Sideways trade in oil while gold is subdued and base metals trade mixed
Analysis details (09:28)
- WTI and Brent futures are essentially flat intraday in holiday-thinned trade and the absence of major macro newsflow in the run-up to the FOMC minutes and the US jobs report later this week. “We may have officially moved into the second half of the year, but the market still has the same concerns which plagued it over much of the first half of the year. And the biggest problem at the moment is the uncertain demand outlook.”, according to analysts at ING.
- On the OPEC front, Saudi Arabia’s extra voluntary cuts started yesterday and will last for a month. Furthermore, the OPEC International Seminar takes place from Wednesday to Thursday with some speculation that Saudi may extend those voluntary cuts for a further month – “there is also the potential for further news on whether Saudi Arabia will roll over its additional voluntary cut of 1mln BPD into August. The market is expecting that they will do so” ING says. The Saudi Energy Minister is poised to give a speech during the event and is expected to underscore OPEC+ solidarity and could include more warning shots at speculators. Saudi Aramco is also expected to announce its Official Selling Prices (OSPs) during the week. WTI resides around USD 70.50/bbl (within a USD 70.23-86/bbl range) while Brent sits above USD 75/bbl (in a USD 75.01-53/bbl range).
- Over to metals, spot gold is subdued as the Dollar edges higher this morning, with the yellow metal on standby for this week’s major risk events including the FOMC and the US Jobs report, but before that, today’s US ISM Manufacturing PMI. Spot gold resides around USD 1,910/oz but within Friday’s USD 1,900.50-22.66 range. Base metals are mixed with 3M LME copper firmer on the day around the USD 8,350/t market, with the market underpinned by the latest data from the National Statistics Institute of Chile showing that domestic copper output contracted for a second consecutive month.
03 Jul 2023 - 09:28- Research Sheet- Source: Newsquawk
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