Iran War Cease-Fire Can't Undo the Middle East's Energy Hangover -- Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil is up 4.1% to $98.62 a barrel.

--European benchmark gas is up 2.1% to 46.25 euros a megawatt-hour.

--Copper futures fall 0.3% to $12,671 a metric ton.

--Gold futures are up 0.3% to $4,790.10 a troy ounce.

TOP STORY:

Iran War Cease-Fire Can't Undo the Middle East's Energy Hangover

The cease-fire agreed to between President Trump and Iran may silence the guns, but the wreckage at key regional energy hubs is set to leave lasting economic damage.

Iranian missile and drone strikes have hit dozens of refineries, oil fields and natural gas export terminals across the region, ensuring a prolonged squeeze on global oil-and-gas markets even if the Strait of Hormuz reopens.

OTHER STORIES:

Extent of Damage to Middle East Energy Facilities Key to Economic Impact, OECD Says

The impact of the conflict in the Middle East on economic growth and inflation around the world will partly depend on the damage caused to energy production and transport infrastructure, according to the Organization for Economic Cooperation and Development's chief economist.

The Paris-based research body last month released new forecasts for the global economy that saw little change under the assumption that energy prices start to fall back later this year from the highs they have reached in the weeks since the U.S. and Israel attacked Iran.

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Portugal's Galp Limits Diesel Exports to Strengthen Domestic Inventories

Portuguese oil company Galp is limiting diesel cargo exports to bolster domestic inventories as severe disruptions to Middle East flows tighten global supply.

"Galp has been adopting more prudent supply and trading policies for intermediate and refined products," a company spokesperson said Thursday.

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More BP Investors Demand Proof That Fossil-Fuel Pivot Will Benefit Shareholders

M?ore BP shareholders ?are backing a move ?c?alling on the energy major to? prove that increasing investment in oil-and-gas production? will deliver value for investors.

The Local Authority Pension Fund Forum, a group representing U.K. pension funds, said Thursday that it was joining other investors in supporting a resolution to be voted on at this month's shareholder meeting, in response to the London-listed group's shift away from a ? renewables-focused strategy.

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Why Green Energy Makes More Sense With Each Price Shock

Will the war in the Persian Gulf spur a durable boost in green energy? For Rahul Agrawal, the answer is definitely yes.

Soon after the U.S. and Israel attacked Iran, he and his colleagues were fielding calls from officials in the Philippines government.

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Hormuz Still Isn't Open, Adnoc Chief Says

Access to the Strait of Hormuz remains "restricted, conditioned and controlled" by Iran, said Sultan Al Jaber, the head of Abu Dhabi's state-owned oil company.

"The Strait of Hormuz is not open," Jaber said in a LinkedIn post, warning that the last cargoes that transited the strait before the conflict are now arriving at their destinations-meaning the true impact of the gap in global energy flows is about to be felt, especially in Asia, which receives most of those shipments.

MARKET TALKS:

U.S. Natural Gas Futures Steady Ahead of Storage Report -- Market Talk

0951 ET - U.S. natural gas futures are little changed ahead of the EIA's weekly inventory report at 10:30 a.m. ET that's expected to show an increase in the storage surplus. The expected above-average injection and weak weather-driven demand are negative for prices, while support comes from strong LNG feedgas demand "and possibly further supply disruptions in the Middle East," Dennis Kissler of BOK Financial says in a note. "Technically, May natural gas remains in a bearish structure." The Nymex May contract is up 0.1% at $2.727/mmBtu.([e-mail])

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Oil Futures Recover Some Ground On Worries About Truce -- Market Talk

0949 ET - Oil futures recover some of the previous day's losses and are hovering under $100 a barrel amid uncertainty about the U.S.-Iran cease-fire and tanker transit through the Strait of Hormuz. "Supply fears linger and restoring capacity damaged during the hostilities cannot be done overnight, keeping crude on track for further gains," Nikos Tzabouras of Tradu says in a note. "On the other hand, there is now a roadmap to resolution and President Trump will likely have strong incentives to conclude the campaign and protect the economy ahead of the midterm elections," he adds. WTI is up 5.7% at $99.83 a barrel, and Brent is up 3.6% at $98.15. ([e-mail])

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Palm Oil Ends Higher; Further Upside Likely -- Market Talk

1010 GMT - Palm oil futures ended higher, tracking crude oil prices. Prices remain below prior peaks despite strong equity performance in the plantation sector, suggesting further upside potential, AmInvestment Bank says in a note. This also indicates that the commodity isn't yet overbought, with the recent break above the resistance level of 4,600 ringgit signaling the early stages of an upward trend, it adds. The Bursa Malaysia Derivatives contract for June delivery rose 56 ringgit at 4,642 ringgit a ton. ([e-mail])

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Oil Rises Further on Fragile Cease-Fire, Hormuz Risks

0916 GMT - Oil prices extend gains as traders weigh a fragile U.S.-Iran cease-fire ahead of Friday talks and persistent risks around the Strait of Hormuz. In mid-morning European trading, Brent crude for June delivery rises 3.6% to $98.2 a barrel, while WTI futures for May are up 2.7% to $97.94 a barrel. "Day 1 of the cease-fire wasn't a success on many fronts," says Neil Crosby, head of research at Sparta Commodities. "Vessel owners will surely be wary of war breaking out again for some time." With a near-term reopening of the Strait of Hormuz still unlikely, analysts expect prices to remain elevated as production disruptions and refinery outages will take time to unwind. ([e-mail])

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OMV Faces Significant Hit From Middle-East Conflict -- Market Talk

0837 GMT - OMV provided a messy update given the widespread impacts from the war in the Middle East, RBC Capital Markets analysts Adnan Dhanani and Matthew Russell say. "OMV has an elevated risk profile relative to peers given higher exposure to the region, with headwinds across its businesses," the analysts write in a note. The Austrian oil-and-gas company faces a greater-than-expected impact in the fuels and feedstock business, they add. Upstream production in the energy business during the first quarter was hit by the disruption in the Middle East. In the chemicals unit, the impact of the recent attack on Borouge facilities that resulted in the closure of some operations is unclear at this point. The stock trades 1.9% lower. ([e-mail])

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European Energy Stocks Rise as Cease-Fire Fragility Lifts Oil Price -- Market Talk

0742 GMT - European energy stocks rise in opening trade, recouping some of the prior session's losses, as oil climbs back toward the $100-a-barrel level. The price rise follows fresh strikes on Lebanon by Israel and reports of low traffic levels through the Strait of Hormuz. Leading the gains are BP, Galp Energia and Repsol--up 1.7%, 1.6% and 1%, respectively. Shell and Eni shares are up 0.6% and 0.8%, respectively. Brent crude for June delivery is up 2.2% to $96.86 a barrel, while WTI futures for May gain 3.3% to $97.51 a barrel. ([e-mail])

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Goldman Cuts 2Q Oil Price Forecast After Cease-Fire -- Market Talk

0645 GMT - Goldman Sachs cut its oil-price forecast for the second quarter after the U.S. and Iran agreed to a temporary cease-fire, citing easing near-term risk premiums. The U.S. bank now sees Brent crude at $90 a barrel and WTI at $87 a barrel in the period, from previous expectations of $99 and $91, respectively. Goldman kept its third and fourth-quarter projections unchanged, at $82 and $80 for Brent and at $77 and $75 for WTI. Analysts added that risks remain skewed to the upside, driven by potentially longer disruptions and crude production losses. ([e-mail])

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Gold Falls as Traders Await U.S.-Iran Talks, Inflation Data -- Market Talk

0641 GMT - Gold prices ease after climbing back above $4,800 a troy ounce in the previous session, as traders await U.S.-Iran talks on Friday and the release of key inflation data. In early European trading, gold futures in New York fall 0.8% to $4,738.10 an ounce. Doubts that the two-week cease-fire would hold are hurting sentiment, reigniting concerns over high energy prices and inflation pressures. Meanwhile, minutes from the Federal Reserve's March meeting revealed that the majority of officials thought progress bringing inflation down could be slower than expected. Traders now await the release of PCE data later on Thursday and CPI figures on Friday. ([e-mail])

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Oil Rises as U.S.-Iran Cease-Fire Appears Fragile -- Market Talk

0626 GMT - Oil prices rise after Wednesday's plunge as shipping through the Strait of Hormuz remains largely constrained and Israeli attacks on Lebanon threaten an already fragile truce. In early European trading, Brent crude for June delivery is up 2.2% to $96.86 a barrel, while WTI futures for May gain 3.3% to $97.51 a barrel after posting the biggest one-day drop since 2020. "The conditional two-week ceasefire is already showing signs of faltering," analysts at Kpler say. "The deep supply challenges in the crude oil market are far from resolved, even if there is a brief logistical window to ease pressure."([e-mail])

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Gold Could Rebuild Gains in Coming Months -- Market Talk

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04-09-26 1026ET