Global Oil Demand Heads for Contraction as Iran War Chokes Flows, IEA Says -- Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil is down 3.6% to $95.70 a barrel.

--European benchmark gas is down 6.7% to 43.32 euros a megawatt-hour.

--Copper futures rise 1% to $13,250 a metric ton.

--Gold futures are up 1.3% to $4,828.20 a troy ounce.

TOP STORY:

Global Oil Demand Heads for Contraction As Iran War Chokes Flows, IEA Says

Global oil demand is set to contract this year as the near-closure of the Strait of Hormuz leaves nations scrambling to secure barrels from an increasingly tight pool of supply, the International Energy Agency said.

The Paris-based organization-a group of Western nations and their allies-now sees global demand shrinking by 80,000 barrels a day this year, from prior expectations of 640,000 barrels a day of growth. In the second quarter, demand is forecast to fall by 1.5 million barrels a day, the sharpest decline since the Covid-19 pandemic.

"The outlook for global oil market balances has rarely been as uncertain, " the IEA said in its closely watched monthly report on Tuesday. "Disruptions to oil supply and trade from the Middle East war continue, aggravating crude and product shortages and pushing prices to levels that are undermining demand."

OTHER STORIES:

$133 vs. $99. What Is the Real Price for a Barrel of Oil?

Which oil price is the right one? These days, the price of a physical barrel of oil is significantly higher than what oil prices in financial markets suggest.

Dated Brent, which reflects oil for actual physical delivery 10 to 30 days out, has risen to $132.74 a barrel as of Monday. Brent futures for the nearest delivery settled at $99.36 a barrel. The gap between the two prices is historic, according to Gary Ross, chief executive officer of Black Gold Investors. Never has the market seen an oil-market disruption of this size, or such uncertainty over what might happen next, he added.

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BP Sees Exceptional Oil-Trading Result as Middle East War Fuels Volatility

BP said it expects an exceptional oil-trading result for the first quarter, with the war in the Middle East fueling market volatility.

Large-scale disruption to oil and natural-gas production and shipping because of the war in Iran jolted energy markets in recent weeks, rocketing crude prices above $100 a barrel and lifting energy stocks. But some of the industry's biggest projects have been targeted during the war, prompting the companies behind them to warn that the conflict could cost them billions of dollars in lost revenue.

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Utilities Plan to Spend $1.4 Trillion Over Next Five Years to Power AI Boom

U.S. utilities are planning a historic investment spree to patch up an aging power grid and meet rising electricity demand for the artificial-intelligence boom.

Capital spending plans for 51 investor-owned utilities have reached an estimated $1.4 trillion for the next five years, according to a new report from PowerLines, a consumer education group. That is up more than 20% from a year ago, when the companies planned to spend about $1.1 trillion over a five-year period.

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Swedish Green Steel Startup Stegra Gets $1.65 Billion Funding to Complete New Plant

STOCKHOLM--Green steel startup Stegra has secured $1.65 billion in new funding from a consortium led by Sweden's prominent Wallenberg family, allowing it to complete construction of its new steel plant.

Stegra, formerly known as H2 Green Steel, is building a large-scale steel mill in northern Sweden that will replace the coal traditionally used for iron ore-based steelmaking with hydrogen produced from renewable energy. Stegra expects to produce steel that cuts carbon dioxide emissions by 95% compared to the traditional process.

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Canada to Temporarily Cut Fuel Taxes Amid Energy-Price Surge

OTTAWA--Canada said Tuesday it would temporarily reduce fuel taxes as it tries to ease the financial squeeze households face from sharply higher energy prices.

Canadian Prime Minister Mark Carney said the tax reductions would take effect on April 20 and run until Labor Day. Gasoline prices have surged by over 30% since the start of military attacks by the U.S. and Israel, which have effectively frozen oil-tanker traffic in the Strait of Hormuz.

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Equinor Sells 8.07% Stake in Renewable Energy Company Scatec For $169 Million

Equinor has partially sold its stake in Norwegian renewable energy company Scatec for around $169 million.

The company said it has divested an 8.07% stake for around 1.6 billion Norwegian kroner ($169.3 million), leaving it with an 8.05% share.

MARKET TALKS:

Oil Futures Move Lower on Hopes for Renewed Talks

0855 ET - Oil futures are lower in early U.S. trade with the market keeping alive hopes the U.S. and Iran will return to the negotiating table. Meanwhile, the Strait of Hormuz remains virtually closed to traffic, extending the more than monthlong supply disruption. The drop as much as $10 a barrel from yesterday's highs reflects "the possibility of renewed talks that could lead to a nuclear deal that would eventually spur a reopening of the strait," Ritterbusch & Associates says in a note. "Even a glimmer of negotiating progress can easily spark a dramatic price decline." WTI for May delivery is off 3.2% at $95.87 a barrel, and June Brent is down 1.5% at $97.90. ([e-mail])

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Oil Seen at $84 a Barrel at End of 2026: BofA Survey

1246 GMT - Investors expect oil to trade at $84 a barrel at the end of 2026, according to Bank of America's Global Fund Manager Survey for April. The price would mark a 38% increase on the $61 a barrel price oil began the year at, analysts from the bank say. More investors expect oil prices to be higher for longer as a result of the war in the Middle East. A total of 28% of investors surveyed expect oil to trade above $90 a barrel at the end of the year, up from 12% last month. Brent crude falls 1.4% to $97.90 a barrel in mid-afternoon European trade. ([e-mail])

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Palm Oil Close Lower, Tracking Crude Oil Prices -- Market Talk

1019 GMT - Palm oil prices end lower, after crude oil retraced from $100 per barrel, said David Ng, a trader at Kuala Lumpur-based Iceberg X. Lower soybean oil prices also weighed on market sentiment, he added. Ng sees support for prices at 4,400 ringgit a ton and resistance at 4,550 ringgit a ton. The Bursa Malaysia Derivatives contract for June delivery closed 87 ringgit lower at 4,468 ringgit a ton. ([e-mail]; @ivy_jiahuihuang)

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BP Update Could Dash Buyback Hopes -- Market Talk

1007 GMT - BP's first-quarter update flagged an increase in the company's net debt, which could dash hopes of a return of share buybacks after the U.K. energy major halted them earlier this year, AJ Bell's Dan Coatsworth says. "That might only be a short-term issue, but it does dampen expectations for BP to share any oil-related windfall with shareholders via buybacks and dividends," Coatsworth says. "BP halted share buybacks in February to focus on debt reduction, and it might argue that any extra income related to the sudden jump in the oil price is better served paying down borrowings." The increase in net debt reflected the need to hold extra working capital to see through a turbulent period in energy markets, he says. BP shares fall 0.4%. ([e-mail])

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Gold Rises to $4,800 on Softer Dollar, Oil Below $100 -- Market Talk

0711 GMT - Gold prices rise to $4,800 a troy ounce, supported by a softer U.S. dollar and oil below $100 a barrel. In early European trading, New York gold futures rise 0.7% to $4,802.70 an ounce, while silver is up 2.1% to $77.25 an ounce. The U.S. dollar index--which tracks the greenback against a basket of major currencies--slips 0.1% to 98.24. Iran's foreign minister said talks with the U.S. have made progress despite no agreement being made yet, while U.S.-brokered negotiations between Israel and Lebanon are set to begin Tuesday in Washington. Traders are now awaiting U.S. producer price data, though the run-up to the Federal Reserve's April policy decision is otherwise relatively quiet. ([e-mail])

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Oil Eases on U.S.-Iran Dialogue Hopes Despite Hormuz Blockade

0700 GMT - Oil prices fall back below $100 a barrel as signs that the U.S. and Iran see scope to continue negotiations lifted hopes, but a U.S. blockade of the Strait of Hormuz keeps crude elevated. Iran's foreign minister said talks have made progress on several issues, echoing comments from the Trump administration. However, the U.S. has begun blocking maritime traffic to and from Iranian ports in order to increase pressure on Tehran. In early European trading, Brent crude slips 0.5% to $98.87 a barrel, while WTI is down 1.5% to $97.56 a barrel. Prices remain up more than 60% year-to-date. "The oil market no longer needs a worst-case escalation to justify higher pricing levels," ANZ analysts say. "Tight balances alone are sufficient to sustain the price of Brent near or above recent threshold levels." ([e-mail])

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Sulfuric Acid Price Surge Threatens Fertilizer, Metal Supplies -- Market Talk

0158 GMT - Surging sulphuric acid prices are raising concerns about the outlook for fertilizer and metal supplies, says Commonwealth Bank of Australia analyst Vivek Dhar. "Rising prices due to shortage concerns directly effects downstream buyers," Dhar says in a note. Roughly half the world's sulphuric acid is used to make phosphate fertilizers, while about 10% is used for metal processing, Dhar says. Sulfuric acid prices have almost doubled year to date as conflict in the Middle East disrupts shipments and China prepares to halt its own exports.([e-mail]; @RhiannonHoyle)

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Aluminum Rises as U.S. Begins Blockade of Strait of Hormuz -- Market Talk

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04-14-26 1039ET