G-7 Ready to Tap Oil Reserves if Needed -- Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil is up 6.1% to $98.38 a barrel.

--European benchmark gas is up 5.1% to 56.88 euros a megawatt hour.

--Gold futures are down 0.9% to $5,110.80 a troy ounce.

--LME three-month copper futures are up 0.5% to $12,928 a metric ton.

TOP STORY:

G-7 Ready to Tap Oil Reserves if Needed

The Group of Seven advanced economies is prepared to release strategic oil reserves to stabilize the global oil market if needed, French Finance Minister Roland Lescure said Monday following an extraordinary meeting called by France to discuss the impact of the war in the Middle East on the global economy.

OTHER STORIES:

Wheat Approaches Two-Year High as Impact of Oil Price Surge Widens

Wheat prices approached a two-year high as the escalating conflict in the Middle East caused oil and fertilizer prices to surge.

Chicago wheat futures were up 1.1% at $6.24 a bushel in morning European trade, after rising above $6.41 earlier in the session. Wheat futures are up just shy of 5% from their pre-conflict levels, and are on track to close at their highest price since June 2024.

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Carbon Tax Can Protect European Steel Industry, Says Outokumpu Sustainability Chief

Finnish stainless steel company Outokumpu's sustainability chief thinks the European Union'sn new carbon tax will keep European smelters competitive.

"We're a big fan of carbon pricing because it can level the playing field," Heidi Peltonen, vice president of sustainability at the Helsinki-based steel producer, said in an interview with WSJ Pro Sustainable Business. The EU introduced the world's first carbon tax at the start of the year.

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Bahrain Oil Refinery Hit by Drones Declares Force Majeure

A Bahraini oil refinery struck overnight by Iranian drones has declared a force majeure, a legal maneuver that means suppliers aren't liable if they fail to deliver, the country's government-run media reported.

The strikes on a refinery complex run by Bapco Energies, the tiny Gulf country's state-run energy company, damaged neighboring residences and resulted in some 32 civilian injuries, Bahrain's National Communication Center said.

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Iran Warns of $200 a Barrel Oil if Strikes on Its Infrastructure Don't Stop

An Iranian military spokesman warned the cost of a barrel of oil could reach $200 if the U.S. and Israel continue hitting Iran's energy infrastructure, as prices rose above $100 a barrel for the first time since 2022 over the weekend.

Israel struck storage tanks at a Tehran refinery, forcing the regime to cut fuel allowances to motorists. "If you can tolerate oil prices above $200 per barrel, continue this game," a spokesperson of the Khatam al-Anbiya Central Headquarters, Iran's military joint command was quoted as saying by state broadcaster IRIB. Since the start of the conflict, Iran and its proxies have struck multiple oil facilities in the region's top-producing countries, including Saudi Arabia, Iraq and Kuwait, prompting a decline in their output.

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Oil, Gas Prices Surge as Iran War Forces Gulf Producers to Cut Output

Oil and gas prices surged Monday as the Middle East war roils energy markets, forcing major producers to shut down output while the Strait of Hormuz remains effectively closed.

In early European trading, Brent crude climbed 11% to $103.14 a barrel and West Texas Intermediate rose 8.9% to $89.49 a barrel, trimming earlier gains on news that Group of Seven ministers are set to discuss the joint release of petroleum reserves. The global benchmarks reached their highest levels since 2022 earlier in the session, touching $119.50 and $103.67 a barrel, respectively.

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EU Leaders Say They Are Working With Gulf Allies to Mitigate Oil Crunch

Leaders of the European Union said they are working with governments in the Middle East to minimize risks to the world's energy security amid attacks on infrastructure and a growing supply crisis.

Ursula von der Leyen and Antonio Costa, respectively president of the EU's executive branch and head of the European Council that brings together leaders of the bloc's member states, on Monday spoke with regional leaders, including representatives of Bahrain, Kuwait, Saudi Arabia and the United Arab Emirates.

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These Crucial Non-Energy Commodities Also Face a Hormuz Squeeze

The Strait of Hormuz is a chokepoint for oil and gas, but the Gulf's energy riches have also made the region a hub for various related commodities that are now also facing a supply crunch.

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Palm, Soybean Oils Rise, Fueled by Crude Oil's Rally

Palm and soy oil prices rose in Asia as the surge in crude oil prices burnishing their appeal as biofuel products.

Prices of front-month Brent crude oil futures rose past $100 to as high as $119.48 per barrel in Asian trade on Monday, as the Middle East conflict continues without a de-escalation in sight.

MARKET TALKS:

Oil Trims Gains on Strategic Reserve Talks But Upside Risks Persist -- Market Talk

1545 GMT - Brent crude is back below $100 a barrel after France's finance minister said the Group of Seven advanced economies is prepared to release strategic oil reserves to stabilize the global oil market if needed. In afternoon trading, the international oil benchmark rises 6.6% to $98.73 a barrel after reaching nearly $120 earlier in the session, while the U.S. oil gauge WTI is up 5% to $86.29 a barrel. "The market has been somewhat calmed by the prospect of a coordinated release of strategic oil reserves by the G-7 allies," says Kathleen Brooks from XTB. However, market watchers warn oil prices still face significant upside risks, and G-7 moves may only offer short-term relief. ([e-mail])

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Hormuz Closure Could Push Crude Toward $150, Macquarie Says

1359 GMT - Crude prices could surge to $150 a barrel or higher if the Strait of Hormuz remains effectively closed for a few weeks, according to analysts at Macquarie. "Should the disruption persist, larger waves of production shut-ins could emerge through the next week across the region, dependent upon relative storage positions," they say. "The reduced transit is creating the action and will require numerous policy, military, and logistical responses to mitigate the upward price move." In afternoon trading, Brent is up 10% to $102.21 a barrel, while WTI is up 8.9% to $89.50 a barrel. ([e-mail])

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Gold Little Changed, With Inflation in Focus -- Market Talk

1353 GMT - Gold prices are little changed in afternoon trading, pressured by a ?stronger dollar and inflation concerns as the Middle East conflict drags on. Futures in New York are down 1.2% to $5,093.30 a troy ounce. From a data standpoint, attention now turns to upcoming U.S. inflation releases, with CPI due Wednesday and PCE figures on Friday. "If the February inflation data is higher than expected, that outcome would reinforce the view that the Federal Reserve may delay any rate cuts in light of the energy shock," says Fawad Razaqzada, market analyst at Forex.com. ([e-mail])

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Middle East Conflict Keeps Oil Above $100 A Barrel

0942 ET - Crude futures are trading above $100 a barrel for the first time since 2022 as the Middle East conflict drags on with Iranian attacks on regional facilities and shipping at a virtual halt through the Strait of Hormuz. The main bottleneck to keep in mind remains the flow of oil through the strait, Neil Crosby of Sparta Commodities says in a note. While a 2-week closure will be ultimately manageable, weeks of supply-chain issues could follow, he says. But a closure of four weeks or more "means essentially no reasonable ceiling for oil and product prices short-term." WTI is up 13% at $102.67 a barrel and Brent is up 12% at $104.09.([e-mail])

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Brent Could Hit $135 if Mideast Disruptions Last Four Months, Rystad Says

1343 GMT - Brent crude could climb as high as $135 a barrel if disruptions in the Middle East persist for four months, Janiv Shah, VP of oil markets at Rystad Energy, says. In a shorter two-month crisis scenario, prices would rise above $110 a barrel in April before easing as supply flows normalize, falling to around $70 by year-end, according to the firm. That would put the 2026 average price at roughly $87 a barrel. In a longer four-month war scenario, Brent would spike to about $135 a barrel by May before retreating to around $85 by the end of the year as market balances stabilize. "The focus has shifted entirely to national energy security, making current oil prices a very tangible threat to global stability," Shah says. ([e-mail])

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Saudi Arabia Reallocating Supply Not Cutting Output, Kpler Says

1144 GMT - Saudi Arabia's output reduction is occurring in fields that don't produce Arab Light crude, the main grade that can be exported via the Yanbu terminal on the Red Sea, Amena Bakr, head of Middle East energy and OPEC+ insights at Kpler, says. Bloomberg on Monday reported that Saudi Arabia is starting oil-output cuts as storage fills up due to Hormuz disruptions. "This is not accurate, according to our understanding," Bakr says in a post on X. "There is a reallocation of supply that's happening, not a cut." Saudi Aramco has been diverting more of its crude via the East-West pipeline, which bypasses the Strait of Hormuz, Kpler says. ([e-mail])

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Sustained High Fuel Prices Would Push Some Airlines Deep Into Red -- Market Talk

1133 ET - Jet fuel prices continuing around $4 a gallon would dramatically hurt airlines' earnings, say UBS analysts Atul Maheswari and Thomas Wadewitz. Delta, United and Southwest would only be able to generate meager profits, while none of the other airlines would make money and some would likely fall deep into the red. Earnings impact in the first quarter is likely to be limited, but the airlines could really start to feel the pain in the second quarter. Companies' share prices are also likely to decline further before seeing any eventual rebound, the analysts say. ([e-mail])

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03-09-26 1218ET