U.A.E. to Leave OPEC in Blow to Group -- Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil is up 2.1% to $110.57 a barrel.

--European benchmark gas is down 3% at 43.29 euros a megawatt-hour.

--Copper futures are down 1.5% at $13,015.00 a metric ton.

--Gold futures are down 2.4% at $4,581.90 a troy ounce.

TOP STORY:

U.A.E. to Leave OPEC in Blow to Group

The United Arab Emirates said it would leave OPEC, dealing a heavy blow to the oil cartel as the war in Iran scrambles alliances and investment priorities among the world's top oil producers.

The sudden departure of OPEC's third-biggest producer further weakens a bloc that despite producing up to four out of every 10 barrels of oil pumped worldwide has been hobbled by internal disunity and the rise of American oil output.

OTHER STORIES:

Iran Is Flooded With So Much Unsold Oil That It's Stashing It in Derelict Tanks

Iran is scrambling to find new ways to store its oil, hoping to avoid a crippling production shutdown as a U.S. naval blockade bottles up its exports and negotiations to end the war remain deadlocked.

With oil backing up at home, Iran is reviving derelict sites known as "junk storage," using improvised containers and trying to ship crude by rail to China. The unusual steps are aimed at delaying an infrastructure crisis and blunting Washington's leverage in the standoff over the Strait of Hormuz.

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Middle East Conflict to Weaken Growth as Commodity Prices Surge, World Bank Says

A jump in commodity prices as a result of the conflict in the Middle East is set to push inflation higher and growth lower in developing economies, the World Bank said Tuesday.

Shipping has largely stopped moving through the Strait of Hormuz since the U.S. and Israel launched their first attacks on Iran in late February, sharply reducing supplies of oil, natural gas, urea and other raw materials to the rest of the world.

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BP Profits Double as Iran War Boosts Oil Traders

BP's quarterly earnings more than doubled as its oil traders capitalized on market volatility triggered by the conflict in the Middle East.

The British energy giant's first-quarter results Tuesday are its first since the conflict in the Middle East upended global energy markets and sent oil and gas prices soaring. They are also the first since Chief Executive Meg O'Neill took charge of the company to lead a turnaround.

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JetBlue Cuts Capacity to Offset Rising Fuel Costs

JetBlue Airways said it is cutting capacity to try to make up for rising fuel costs.

The New York-based airline on Tuesday posted a loss of $319 million, or 86 cents a share, in the quarter ended March 31, compared with a loss of $208 million, or 59 cents a share, a year earlier.

MARKET TALKS:

Gold Falls More Than 2%, With Focus on Inflationary Impact of High Energy Prices -- Market Talk

1430 GMT - Gold prices extend losses as oil prices climb above $100 a barrel, fueling concerns over the inflationary impact of higher energy costs as U.S.-Iran talks remain at an impasse. Futures in New York are down 2.3% to $4,583.60 a troy ounce. "Rising energy prices, a stronger dollar, firmer inflation expectations and a renewed higher-for-longer view on U.S. interest rates have together created a more challenging short-term environment for non-yielding assets," says Ole Hansen from Saxo Bank. Meanwhile, silver futures fall 3.3% to $72.56 an ounce, while platinum is down 2.2% to $1,952.30 an ounce. ([e-mail])

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Impact of U.A.E.'s OPEC Exit Will Be Longer Term -- Market Talk

1020 ET - The United Arab Emirates' departure from OPEC will have little near-term impact on the oil market with the Strait of Hormuz closed, says Neil Crosby of Sparta Commodities. The producer's exit from the group "was always on the cards at some point," he says. The U.A.E. can probably produce between 4.5 million and 4.8 million barrels a day sustainably once the strait reopens--above its 3.4 million b/d OPEC quota--but given the loss of 1 billion barrels of oil supply since the war in the Middle East started "this won't be a huge headache for a while." ([e-mail])

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U.A.E.'s Exit From OPEC Opens Door to Higher Oil Output -- Market Talk

1419 GMT - The U.A.E.'s departure from OPEC could pave the way for a meaningful increase in production once shipping through the Strait of Hormuz resumes, says David Oxley from Capital Economics. "The U.A.E.'s desire to pump more oil has been placated up to now by a combination of the rest of OPEC turning a blind eye to its overproduction and also raising its quota levels," the chief commodities economist says. In a more stable environment, the country could potentially add around 1 million barrels a day to output, bringing total production to about 4.5 million barrels a day. The U.A.E. is also relatively well-positioned to withstand lower oil prices compared with some Gulf peers, says Oxley, thanks to a more diversified economy. ([e-mail])

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U.A.E. Exit Raises Questions Over OPEC's Long-Term Ability to Stabilize Oil Market -- Market Talk

1344 GMT - The near-term effects of the U.A.E.'s exit from OPEC and OPEC+ might be limited due to continued disruption in the Strait of Hormuz and wider geopolitical uncertainty, Rystad Energy's Jorge Leon says. However, the longer-term implications are more significant, Leon says. "A structurally weaker OPEC, with less spare capacity concentrated within the group, will find it increasingly difficult to calibrate supply and stabilize prices," according to the head of geopolitical analysis. The move also raises broader questions about the sustainability of Saudi Arabia's role as "the market's central stabilizer," particularly if it is left shouldering a disproportionate share of production adjustments, Leon says. ([e-mail])

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U.A.E.'s Exit From OPEC Long-Term Negative for Oil Prices -- Market Talk

0916 ET - The United Arab Emirates' decision to leave the Organization of the Petroleum Exporting Countries on May 1 to pursue its energy goals is ultimately bearish for oil prices, Spartan Capital's Peter Cardillo says. "We believe this decision is a negative development for the cartel and could lead to increased oil supply entering the market after the war. It also reinforces a long-term bearish outlook on oil prices." U.A.E. produced around 3.4 million barrels a day in February, before the war between the U.S. and Iran, according to secondary sources cited by OPEC. ([e-mail])

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Crude Futures Rise As Supply Disruption Persists -- Market Talk

0847 ET - Oil futures extend their rally following news that the United Arab Emirates will leave OPEC and OPEC+ effective May 1. The UAE says the decision reflects its long-term strategic and economic vision and evolving energy profile, including accelerated investment in domestic energy production. Oil traders are also watching the virtual standstill at the Strait of Hormuz. With the dual blockade of the strait, "supply disruptions persist and the market tightens, keeping oil prices on track for further gains," Nikos Tzabouras of Tradu says in a note. "The longer oil prices remain elevated, the greater the risk to the global economy and ultimately to crude demand itself." WTI is up 4.2% at $100.38 a barrel, and Brent is up 3.7% at $112.24 a barrel. ([e-mail])

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Palm Oil Edges Higher Amid Mixed Cues -- Market Talk

1011 GMT - Palm oil reversed morning declines to end slightly higher amid mixed cues. While prices of the vegetable oil have been weighed by weak exports, the uncertainty surrounding the Strait of Hormuz continues to support crude oil and biofuel prices, Kenanga Futures says in a research note. Meanwhile, the potential for bargain-hunting following a recent pullback offers additional support, although lingering concerns about rising production levels may cap upside momentum, it says. Kenanga sets the support and resistance levels for the July futures contract at 4,500 ringgit and 4,650 ringgit, respectively. The Bursa Malaysia Derivatives contract for July delivery rose 3 ringgit to 4,537 ringgit a ton. ([e-mail])

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(END) Dow Jones Newswires

04-28-26 1132ET