Stocks Drop While Oil Prices Surge -- Commodities -2-

0831 ET - It's reasonable to expect a virtual halt to energy flows through the Strait of Hormuz while the U.S./Israel-Iran conflict continues, Macquarie Group's Vikas Dwivedi says in a note. "We believe the duration of conflict remains the most important consideration for energy markets," Dwivedi says, as well as the targeting of energy infrastructure which so far appears limited. "The world can handle the Strait of Hormuz being shut in for 1 to 2 weeks, but the impact on oil price will escalate rapidly after the third week and definitely after the fourth week," he says. "The reason is not so much the lack of world storage and SPR's, but the deliverability." ([e-mail])

--

Natural Gas Prices Soar As Qatari Complex Halts Production -- Market Talk

0816 ET - Natural gas prices are soaring after QatarEnergy halted LNG production following a drone attack on its Ras Laffan complex, increasing worries about supplies through the Strait of Hormuz. A disruption of flows of two or so weeks would push Dutch TTF and Asian JKM prices to a $14-$18 per million British thermal units, or EUR40s to EUR50s per megawatt/hour, Citi's Anthony Yuen said in a note before the Qatari production halt. A longer-than-expected disruption could lift prices to around the $30/mmBtu range, or close to EUR100/MWh. If the conflict ends in coming days, "with credible de-escalation following," it could swiftly lower prices to pre-war levels, he adds. Dutch TTF is up 46% at EUR46.70/MWh. In the U.S., a key supplier of LNG to Europe, Nymex natural gas is up 7.1% at $3.063/mmBtu.

--

Oil Price Shock Scenario Raises Inflation Concerns -- Market Talk

0812 ET - As the markets and global economy grapple with the impact of AI on the workforce and potential disinflation, Evercore ISI says they now have to contend with the economics of an oil price shock as well. In a scenario where crude oil hits $100-$120 a barrel, the firm says the price shock would be substantial "raising risks to inflation expectations, and, while prior oversupply would prevent an immediate quantity constraint, any sustained closure of the Straits could bring quantity constraints as well as price impacts." Benchmark U.S. crude futures jump 7% to around $72 a barrel, while Brent futures, the global price gauge, surge 8% to roughly $79. ([e-mail])

--

Short-Term Oil Spikes Have Limited Impact on Cash Flows -- Market Talk

1212 GMT - Short-term oil price spikes have limited impact on energy companies' cash flows, says Maurizio Carulli from Quilter Cheviot. "There needs to be at least a month or two of a substantially different level of oil price to have a meaningful impact on quarterly indicators both at a company and at a macroeconomic level," the energy analyst says. "It is the average oil price over a given period of time which matters, not the single discrete data points." Roughly, a sustained $10-a-barrel change in oil prices can cause an increase or decrease in cash flow by 5%-10% for integrated energy companies and by 10%-15% for exploration and production companies, according to firm. ([e-mail])

--

European Gas Could Exceed 70 Euros if Strait of Hormuz Flows Halted for a Month -- Market Talk

1049 GMT - European natural-gas prices could nearly double if flows through the Strait of Hormuz were fully stopped for one month, according to analysts at Goldman Sachs. In such a scenario, northwest European gas storage would have around 8% less capacity, pushing TTF prices to about 62 euros a megawatt-hour from around 39 euros currently. With oil prices likely rising as well, TTF could climb further to 74 euros a megawatt-hour. For a longer disruption lasting more than two months, gas prices could exceed 100 euros, which would likely lead to significant global gas demand destruction--a situation where high prices force consumers to reduce their gas usage--as markets would struggle to compensate for the supply shortfall before the next winter, Goldman says. ([e-mail])

--

Palm Oil Tops 4,100 Ringgit/Ton as Crude Oil Surges -- Market Talk

1035 GMT - Palm oil rallied to end above 4,100 ringgit a ton, as mounting concerns about escalating tensions in the Middle East push crude oil prices higher, according to David Ng, a trader at Kuala Lumpur-based Iceberg X. The surge in oil prices is also pushing palm oil prices higher, Ng says. He sees crude palm oil prices supported above 4,050 ringgit a ton and resistance at 4,250 ringgit a ton. The Bursa Malaysia Derivatives contract for May delivery closed 104 ringgit higher at 4,146 ringgit a ton. ([e-mail])

--

Israel Gas Exports Halt to Alter Regional Flows, Kpler Says -- Market Talk

0757 GMT - Israel's decision to suspend gas exports and some of its offshore natural gas production due to security concerns following an outbreak of hostilities with Iran could alter regional flows, Kpler's Jana Sutenko says. "Israel has several natural gas fields offshore the Mediterranean Sea, making it one of the key regional gas suppliers," she says. The suspension might impact regional flows and LNG production in Egypt, as Israel is a key supplier to both Egypt and Jordan. Israel's energy ministry said it is in contact with neighboring countries and will resume supply as soon as possible, but didn't specify which rigs were shut down, according to Kpler. ([e-mail])

--

Write to Barcelona Editors at [e-mail]

(END) Dow Jones Newswires

03-02-26 1214ET