EMEA Morning Briefing : IEA Proposes Largest Ever Oil Release From Strategic Reserves

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Opening Call:

European stock futures were broadly higher, tracking gains in Asian stock benchmarks. U.S. Treasurys ticked lower, and the dollar weakened. Gold and oil fell.

Equities:

Stock futures in Europe were broadly higher early Wednesday as investors continue to track oil prices amid the Mideast conflict. The WSJ has reported that the International Energy Agency has proposed the largest release of oil reserves in its history to bring down crude prices, citing officials familiar with the matter.

The release would exceed the 182 million barrels of oil that IEA member countries put onto the market in two releases in 2022 when Russia launched its full-scale invasion of Ukraine, the officials said. Countries are expected to decide on the proposal on Wednesday.

The conflict in the Middle East continues, but the fear that hit the investor community late last week continues to ease, NAB's Skye Masters said. There appears to be "no clear driver of the re-pricing in markets aside from sentiment," the head of Markets Research said.

Forex:

The U.S. dollar weakened slightly amid oil-price weakness. The partial retracement in energy prices amidst prospects of the Iran conflict nearing an end have helped to ease near-term pressure on regional FX, OCBC Group Research said. However, "geopolitical developments remain fluid and risks of further [oil] supply disruption cannot be ruled out," it added.

Bonds:

U.S. Treasury yields were tracking slightly lower as markets navigate contradicting assessments of how long the war in Iran could last. President Trump indicates an end to the conflict could be near, while vowing to fully destroy Iran's military capabilities. Meanwhile, hopes that rich countries will release strategic oil reserves are helping to ease oil prices.

Also in focus is the February U.S. consumer inflation, due later in the global day. The data is expected to keep January's 2.4% pace, or 2.5% in the core reading, according to a WSJ consensus.

Energy:

Oil futures declined early Wednesday after swinging between gains and losses. Traders were likely digesting the IEA's proposal for the largest-ever release of oil reserves to reduce crude oil prices. The member countries are expected to decide on the proposal on Wednesday.

A plunge in oil prices intensified early Tuesday afternoon after Energy Secretary Chris Wright said on X that "The U.S. Navy successfully escorted an oil tanker through the Strait of Hormuz to ensure oil remains flowing to global markets." The prospect of a prolonged energy shock momentarily dimmed, but the message vanished within minutes. However, it was enough to wipe out million-dollar trades.

Metals:

Gold edged lower. "The gold market is currently facing opposing forces," XS.com's Antonio Di Giacomo said. "Geopolitical uncertainty in the Middle East is supporting demand for safe-haven assets," the senior market analyst said. However, U.S. dollar strength and rising bond yields are limiting its upside. For now, investors are likely to closely monitor upcoming U.S. inflation data, especially CPI and PCE price index, the analyst added.

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Base metals were mixed amid volatile trading. Macro funds are using commodities as part of broader cross-asset positioning, driving elevated volatility, said Sucden Financial. "We see the complex continuing to trade primarily as a macro-driven asset class, with cross-asset positioning and energy developments dominating short-term price action," it added.

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Iron ore advanced with prices supported by tightening spot liquidity amid tensions in the Middle East, according to Nanhua Futures analysts. Fundamentals show seasonal weakness in both supply and demand, they said. While near-term price has support, the upside is capped by high supply and weak demand, they added.

TODAY'S TOP HEADLINES

IEA Proposes Largest Ever Oil Release From Strategic Reserves

PARIS-The International Energy Agency has proposed the largest release of oil reserves in its history to bring down crude prices that have soared during the U.S.-Israel war with Iran, officials familiar with the matter said.

The release would exceed the 182 million barrels of oil that IEA member countries put onto the market in two releases in 2022 when Russia launched its full-scale invasion of Ukraine, the officials said. The proposal was circulated at an emergency meeting of energy officials from the IEA's 32 member countries on Tuesday.

Iran's Control of Hormuz Means It's Exporting More Oil Today Than Before the War

Iran is exporting more oil through the Strait of Hormuz than before the war, showing it is in control of a strategic waterway that it has closed off to the rest of the region's oil producers.

As Gulf Arab oil producers from Saudi Arabia to Iraq cut production and scramble for new routes that bypass the strait, Iran is conducting business as usual, according to data from tanker-tracking firm Kpler, throwing a financial lifeline to Tehran as it comes under blistering attack from the U.S. and Israel.

The World Needs These Two Middle East Pipelines Now More Than Ever

Two pipelines built just for the occasion-one in Saudi Arabia and one in the United Arab Emirates-bypass the Strait of Hormuz. They are the only ways to get a significant amount of oil out of the Persian Gulf into world markets.

The pipes can't replace the flows carried by tanker ships, but their use is almost all that is preventing an even worse crisis from unfolding. Saudi Arabia in particular is pumping as much crude as possible through its pipeline to its Red Sea port of Yanbu, built in the early 1980s when the Iran-Iraq War threatened shipping in the Persian Gulf.

Europe's Far Left Is Having Its Moment

Europe's far right has surged. Now the far left is pushing back.

Some voters are moving to the left, boosting parties that appeared moribund just a few years ago, polls and recent elections show. The center is now struggling to contain challenges from both the right and the left.

Oracle Raises 2027 Sales View as AI Demand Outpaces Supply

Oracle raised its sales outlook as demand for artificial intelligence continues to outpace supply.

Oracle said companies have a growing need for cloud computing to train and run AI. Meanwhile, the Austin, Texas, company is using AI internally to replace some of its own employees.

OpenAI Faces Lawsuit Over Safety Protocols Ahead of Canada School Shooting

OTTAWA-The mother of a girl injured after a fatal school shooting last month in Canada launched a lawsuit against OpenAI for its decision not to inform police of the suspect's interactions with its ChatGPT chatbot.

The notice of civil claim is filed in the Supreme Court of British Columbia, Canada's western-most province and home to the remote town of Tumbler Ridge - where eight people were killed and dozens injured in the country's worst school shooting in decades. Among the wounded was Maya Gebala, who sustained a traumatic brain injury and permanent cognitive and physical disabilities after struck by bullets above her left eye and neck, according to the claim, filed by lawyers in Vancouver, British Columbia on behalf of Cia Edmonds, Maya's mother.

Bill Ackman Details Plan to Take Hedge-Fund Firm, New Fund Public Simultaneously

Billionaire investor Bill Ackman filed to take public his hedge-fund firm, Pershing Square, in tandem with a new investment fund, a bold bet to capitalize on his social-media fame.

For Ackman, the unique double listing is an attempted do-over of a botched 2024 offering of the new investment fund, Pershing Square USA. Ackman now plans to entice investors to buy shares in the closed-end fund by giving them shares in his hedge-fund firm at no additional cost.

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Expected Major Events for Wednesday

00:01/UK: Feb UK Nations and Regions Growth Tracker

07:00/ROM: Jan Retail trade

07:00/GER: 4Q Labour cost index

07:00/DEN: Jan External trade (provisional figures)

07:00/DEN: Jan Balance of payments (provisional figures)

07:00/GER: Feb CPI

08:00/SVK: Jan Foreign trade

08:00/SPN: Jan Retail Sales

09:00/EU: Feb Long term interest rates statistics

10:00/CRO: Jan Foreign Trade

10:00/CRO: Feb PPI

11:00/FRA: Jan OECD CPI

11:00/POR: Feb CPI

16:59/AUT: Mar OPEC Monthly Oil Market Report

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

03-11-26 0115ET