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Russell: Refined fuel prices in Asia are declining, but supply is still stressed.
The price of refined fuels has fallen sharply, in line with the declines seen in crude oil prices in the wake of the tentative truce between the United States & Iran. However, the levels remain high enough to indicate a shortage. The prices of gasoil and jet fuel in Singapore, the Asian trading center, all dropped by double digits on Wednesday amid the?market relief? that the deal could lead to the reopening of the Strait of Hormuz. The United States and Iran have made separate announcements about a ceasefire, and their commitment to?peace negotiations. It appears that the deal is already on the rocks. Tehran said it was "unreasonable to continue talks with the United States to form a permanent agreement as long as Israel continued to attack Hezbollah, a group that is aligned with Iran. Some vessels have been reported to have passed through the Strait of Hormuz after the agreement, but it is yet to be seen if more ship owners are willing to risk the narrow waterway, through which up to 20% of crude oil, refined goods and liquefied gas were transported before the U.S.-Israeli attack on Iran, on February 28, 2008. Even if tanker movement does pick up, the Asian market for physical refined product still appears?stressed' and will probably remain that way for an extended period. Brent crude futures, the global benchmark for crude oil prices, closed at $94.75 per barrel on Wednesday. This is a 13.3% drop from their previous close. Brent finished at $72.48 in February, meaning that it has gained 30% since the beginning of the Iran conflict. The price increase for refined products in Asia is much higher than the Brent rise. Jet fuel has been the hardest hit, as it is more difficult to store. Singapore jet fuel On Wednesday, the price of a barrel ended at $193.53. This is down 14.2% compared to its previous closing and 20% lower than the record high $242.06 set on March 30. It is still higher than the $93,45 that it closed at the day before Israel and the U.S. launched their aerial attack against Iran. Gasoil (the building block of diesel) ended Wednesday at $145.02 per barrel, a drop of 17.1% from its previous close. However, it remains 59% above the closing price on February 27. Gasoline The price of a barrel finished Wednesday at $120.80, a 13% drop from its previous close. Light vehicle fuel has increased by 52% since the February 27th close. MARKET TIGHTENS The premiums that refined fuels command over crude futures indicate that many Asian refiners struggle to obtain enough oil to maintain their operating rates. According to Kpler's data, the estimated seaborne crude imports in Asia for April are 19.22 million barrels a day (bpd). The three-month average moving price of 25.0 millions bpd was recorded in the first quarter 2026. Also, it's worth noting that the Strait of Hormuz was effectively closed after the conflict began. The seaborne arrivals in the region with the highest imports are expected to be lower than usual in May even if more tankers begin to pass through the Strait. Kpler data estimates April exports by Asian refiners to be 6.61 million bpd. This is down from 7.32 million in March. According to Kpler, April and March are the two smallest months in Asia for refined fuel imports since April 2017. They're also a far cry from the 11,1 million bpd of February. Fuel prices are high because of the loss of 5 million bpd in refined product exports to Asia. Even if oil starts to flow from the Middle East to pre-conflict rates, it will take months for the supply chain to catch up. The situation could worsen in the near future, particularly if the ceasefire is broken and the Strait of Hormuz is closed to most vessels. You like this column? Open Interest (ROI) is your new essential source of global financial commentary. ROI provides data-driven, thought-provoking analysis on everything from soybeans to swap rates. The markets are changing faster than ever. ROI can help you keep up. Follow ROI on LinkedIn, X. These are the views of the columnist, an author for.
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Chevron expects to earn up to $2.2 Billion more in Q1 from higher prices
Chevron announced on Thursday that it expected to see a boost of $1.6 billion to $2.2 billion in its first-quarter earnings, compared to the fourth quarter?of 2025. This was due to a'surging' oil and gas prices from the volatility associated with the Iran War. Oil prices soared by up to 65% after the conflict began on 28 February. Some oil and gas fields shut down production in the Middle East - the Strait of Hormuz, a conduit that carried a fifth of global energy flows, was effectively closed. According to LSEG, Brent crude oil prices in the first quarter averaged $78.38 a barrel, up by 24% compared to the previous three-month period. Chevron's net oil-equivalent production will average between 3.8 and 3.9 million barrels a day, with volume affected by downtime in Kazakhstan's Tengizchevroil Project and reduced output throughout the Middle East. Exxon Mobil, a rival company, said that higher oil prices could boost its earnings by $1.4 billion in the upstream sector compared to?the previous quarter. Exxon signaled that overall earnings may decline from the previous quarter as a multibillion-dollar loss related to financial hedging was expected to outweigh the gains from higher prices for oil and gas triggered by Middle East conflict. Chevron said that timing effects related to hedging and accounting will impact first-quarter earnings. Earnings and operating cash flow, excluding working capital, are expected to be reduced by $2.7 to $3.7 billion after tax. The main effect is on downstream, but the impact should reverse in time. Chevron reported earnings of $3.04 billion in the fourth quarter. (Reporting and editing by Vijay Kishore, Pooja Deai, and Sumit Saha from Bengaluru)
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The MORNING BID AMERICAS Relief rally is paused
Amanda Cooper gives us a look at what the U.S. market and global markets will be like today. The'recently agreed on two-week Iran truce wobbled as Washington and Tehran disagreed over what the 'deal actually covered. Oil prices and stocks fell as the Strait of Hormuz was effectively closed to vessels. A new 'war of words' broke out between both sides as weekend peace negotiations looked likely. Below, I'll go into more detail. Listen to the Morning Bid podcast. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a weeks. RELIEF Rally HITS PAUSE Brent crude and WTI crude both rose again on Thursday, on renewed uncertainty. Both benchmarks reached $98 per barrel before falling slightly. The prices are still well below those seen earlier in the week. After Wednesday's rally, the Nikkei 225 and KOSPI in South Korea both fell on Thursday, after a multi-day gain. European shares opened lower and U.S. Futures were in the red just before the bell. The dollar traded sideways in currencies as traders sought to determine whether the U.S. Iran ceasefire will hold. Meanwhile, the yen gave back some of its Wednesday gains and now trades at around 159 dollars. The Strait of Hormuz is effectively closed, which has raised doubts about the durability of this ceasefire. Iranian coastguards warned on Wednesday that vessels without permission will be "targeted" and destroyed, and Tehran continues to consider charging a fee for transiting the waterway. Iran also claims that the continued Israeli strikes in Lebanon are a violation of the ceasefire. While peace talks may still begin on Saturday, Iran’s chief negotiator has suggested that the process would be "unreasonable". Meanwhile, President Trump has issued new military threats. All of this is unlikely to convince markets that the ceasefire is the breakthrough they had hoped for, or that the energy crisis facing the global economic system will abate anytime soon. This keeps the threat of inflation on the table and has helped to slow the rally in U.S. Treasury bonds. The traders will be looking out for the February personal consumption expenditures report on Thursday. It is expected that U.S. Prices have risen by 0.4% in a second consecutive month, even before the recent jump in energy costs. The minutes of the Fed's latest policy meeting were published on Wednesday and showed that some policymakers are leaning towards a rate increase as its next move. "Many participants" continued to support rate cuts at the meeting, but "most" also saw possible risks to economic expansion from the war. Chart of the Day Since the beginning of the U.S. - Iran war, the daily shipping traffic through the Strait?of Hormuz is less than 10% of what it was historically.?Tehran has also demonstrated its ability to cut off Gulf oil supplies. This shows how the conflict has already changed power dynamics in this region. Watch today's events * U.S. PCE inflation data for February (8:30 am EDT), weekly jobless claims (8.30 am EDT), and final Q4 GDP (8.30 a.m. EDT) * U.S. 30 year bond auction (1 pm EDT) Want to receive "the Morning Bid" in your email every morning? Subscribe to the newsletter. Follow us on LinkedIn, X and ROI. The opinions expressed by the author are their own. These opinions do not represent the views of News. News is committed to the Trust Principles and to integrity, independence and freedom from bias.
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Kremlin: Indonesian president may visit Russia to meet with Putin
Kremlin spokesperson?Dmitry Peskov? said on Thursday that Indonesian President Prabowo?may? visit Russia to hold a?talk with President Vladimir Putin. The Kremlin stated earlier this week that the global energy crisis was causing a'shaking of the foundations of oil and gas markets. Peskov responded that contacts were being made between the two leaders. Prabowo’s spokesperson didn't immediately respond to an inquiry for comment. About 20% to 25% of Indonesian crude oil imports are sourced from the Middle East. The government says it will increase?imports to other countries such as Angola and Nigeria to ensure a sufficient supply in Indonesia. Prabowo announced on Wednesday that he would be traveling abroad soon. He refused to disclose his destination but said the trip was meant to'secure Indonesian interests. Reporting by Dmitry Antonov, Stefanno Nangoy and Fransiska Sulaiman in Jakarta. Writing by Vladimir Soldatkin. Editing by Andrew Osborn.
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World Bank predicts India will grow 6.6% in FY27; West Asia crisis still persists
The World Bank warned that India's 6.6% economic growth?for fiscal year 2027 may?face significant risk as the Iran War?fans inflation concerns. However, ample foreign exchange buffers, and a well capitalised banking system, could help mitigate this. There were still doubts about a fragile ceasefire in the Middle East that lasted for two weeks, which raised concerns over energy flow restrictions through the Strait of Hormuz. India, which imports 90% of its crude oil, is "among the economies most vulnerable to long-term war-related disruptions in energy supply." World Bank India's?Economist Aurelien?Kruse stated at a New Delhi news conference on Thursday that retail inflation is expected to be?at 4,9% for the current financial year. This is due to higher food and energy costs and pressure from exchange depreciation, he said. Investors have already been rattled by the?vulnerability. The rupee fell to a new record low after foreign funds pulled $19 billion out of the markets between March and April. The central bank of India expects the growth rate to drop to 6.9% by fiscal 2027, from 7.6% expected in fiscal 2026. The average inflation rate for the year is forecast at 4.6%. Kruse said that the cost of raw materials, energy and petroleum products will increase for the industrial sector. India's forex ?reserves--sufficient for at least 11 months as per the Reserve Bank of India--could help, the World Bank said. The latest data shows that forex reserves increased to $697.1 billion by April?3, from $688.06 in the previous week. The World Bank stated that "India is still one of the fastest-growing economies in the world, even with the recent slowdown." RISE IN DEFICITS According to the World Bank, India's current-account deficit is expected to rise to 1.8% of GDP in fiscal 2027 due to an increase in energy import bill. According to the 'bank, the general government fiscal gap is expected to rise marginally, to 7.6% GDP, compared to 7.3% without the conflict. This is because higher energy prices are likely to lead to higher expenditures on fuel and fertilizer subsidies, while lower excise duties will limit revenue growth. The bank also added that the fiscal deficit will gradually decline over the medium-term.
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China believes'relevant parties can grasp the chance of peace in Iran war
China's Foreign Ministry said that it hoped "relevant parties" would seize this opportunity to bring the Middle East back to stability. This came after Iran and the U.S. agreed on a ceasefire following the Middle East conflict. In a press briefing, the spokesperson for China's foreign ministry Mao Ning stated that China has "actively tried to promote reconciliation and avoid further fighting." Both the U.S.A. and Iran agreed late on Tuesday to a ceasefire of two weeks?to the conflict which has shaken?global markets? and caused?geopolitical turmoil? Mao, the Chinese leader, said that Beijing hoped the relevant parties would take advantage of the chance for peace. "Resolve differences by dialogue and consultation and strive to restore peace and stability as soon as possible in the Gulf region and the Middle East," Mao added. Donald Trump, the U.S. president, has vowed to keep military 'assets' in the Middle East unless a peace deal with iran is achieved. He also warned that if Iran did not comply with the terms of the ceasefire there would be a significant escalation of fighting. Prices of oil rose on fears about supply and the future of restrictions in the Strait of Hormuz. Reporting by Eduardo Baptista, Beijing newsroom. Writing by Farah Masters; Editing by Alison Williams & Shri Navaratnam.
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Gold prices steady as investors look to US-Iran ceasefire; brace for inflation data
The gold?price was steady on Thursday, as investors remained cautious over the 'fragile' U.S.-Iran truce. A key U.S. Inflation Report due later that day will also be a focus for any interest rate clues. As of 0716 GMT, spot gold was unchanged at $4,715.45 an ounce. U.S. Gold Futures for June Delivery fell 0.8% to $ 4,739.40. "It does not seem that gold is looking for much?at the moment. Brian Lan, Managing Director of GoldSilver Central, said that there is still much speculation about what will happen after the ceasefire. Lan predicted that gold would consolidate between $4 607 and $4 860 in the near future. Donald Trump, the U.S. president, has vowed to keep military assets in Middle East until an agreement with Iran is reached. He also warned that a major increase in violence would occur if Iran failed to comply. Israel's heaviest strike yet on?Lebanon was carried out Wednesday. It killed hundreds and drew a threat from Iran. The price of oil rose on Thursday amid concerns that supplies from the Middle East, a key region for producing oil, may not resume fully due to doubts about the durability of the two-week ceasefire. Since the beginning of the war on February 28, spot gold has fallen more than 10%. Higher energy prices have fueled inflation fears and caused markets to reassess their expectations for interest rate cuts, which in turn reduced non-yielding metal's appeal. The minutes of the Federal Reserve's meeting on March 17 and 18 revealed that policymakers believed that rate increases?could? be necessary?to combat inflation that continues to exceed the central banks' 2% target. U.S. The Fed may be able to give more clues about its policy direction by releasing the Personal Consumption Spending data for February at 1230 GMT on Thursday. Also, the March Consumer Price Data on Friday. Standard Chartered stated in a note published on Wednesday that "we expect gold to continue its 'gains' in the months to come, despite increased?geopolitical risks." (Reporting by Pablo Sinha and Noel John in Bengaluru; Editing by Sumana Nandy, Subhranshu Sahu, and Harikrishnan Nair) (Reporting from Pablo Sinha and Noel John, Bengaluru. Editing by Sumana Nandy and Subhranshu Sahu. Harikrishnan Nair.)
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Iron ore falls to a one-month low due to rising supply and China's demand concerns
Iron ore prices fell?on Thursday, to their lowest level in over a month. This was due to a combination of rising supply and a lack of confidence in the prospects for demand in China's top consumer. The most traded?iron ore on China's Dalian Commodity Exchange closed the daytime trade at 750 Yuan ($109.78), its lowest level since March 4. Now, the September contract is the most traded instead of May. The benchmark May ore price on the 'Singapore Exchange' fell by 2.86% at 0700 GMT to $102.75 per ton, after hitting its lowest level since?March 10, when it was $102.1. Iron ore prices are under pressure due to higher shipments, according to analysts at broker Jinyuan Futures. They said that low profitability among steelmakers will disincentivise the mills to ramp up production, indicating a limited upside in demand. Analysts and traders, who spoke on condition of anonymity due to the sensitive nature of the issue, also said that speculation about a possible agreement between?China's iron ore state buyer and global miner BHP on a 2026 contract term contract weighed heavily on the prices. This is because a resolution to the long-running dispute will increase the availability of spot cargo at ports. The China Mineral Resources Group, which was set up by BHP in 2022 in order to centralise the iron ore supply and get better terms from mines, is locked in a supply contract negotiations with BHP. This has prevented domestic steel mills from purchasing some of BHP's iron ore brands. Brandon Craig, the incoming CEO of BHP, met on Wednesday with the Chairman of the Chinese Aluminium Giant?Chinalco after Craig stated last month that his focus would be on strengthening BHP's relationship in China. Coking coal, coke and other steelmaking components fell by 3.19%?and 0.66% respectively. The benchmarks for steel on the Shanghai Futures Exchange have been moving sideways. Rebar and hot-rolled coil both fell 0.15% and 0.42% respectively, while stainless steel increased 0.39%. $1 = 6.8316 Chinese Yuan (Reporting and editing by Subhranshu Sahu; Beijing newsroom)
Texas braces for more summer electrical power signals: Kemp
The Electric Reliability Council of Texas (ERCOT) has actually warned reserve margins will be squeezed next week as temperatures increase and it may require to advise generators to delay nonurgent upkeep.
ERCOT is the independent system operator for the majority of Texas, handling the circulation of power to more than 27 million consumers representing about 90% of state-wide load.
ERCOT has issued comparable cautions several times over the last month, after issuing numerous alerts calling on customers to lower their power intake last summer season to avoid the danger of rolling blackouts.
The state's summer power scarcities are mainly the result of fast population and financial development, which has actually left generators struggling to keep pace with the rapid increase in load.
The state's resident population increased to 30.5 million in 2023 from 22.0 million in 2003, a typical yearly increase of 1.6%.
The state economy grew at an average yearly rate of 3.4%. in between 2017 and 2023, compared to 2.2% for the nation as a. whole.
As an outcome, state electrical energy sales increased to 487. billion kilowatt-hours (kWh) in 2023 from 323 billion kWh in. 2003, a typical annual boost of 2.1%.
Texas power sales have actually grown more than 3 times quicker. than in the rest of the country, where they increased at an. typical rate of simply 0.6% per year between 2003 and 2023.
DEVELOPMENT AND SECLUSION
Like other fast-growing electrical power systems, such as those. in China and India, ERCOT has actually struggled with regular inequalities. between generation and load.
It is much harder to balance generation and load, while. maintaining an adequate reserve margin, in a system. characterised by quick development than one with flat or decreasing. demand.
Flat or decreasing load usually means there are a lot of. legacy generators no longer in regular service however that can be. contacted us to launch when reserve margins become tight. ERCOT does. not have that option.
The system's issues are intensified since it has couple of. links with power networks in the rest of the country that would. enable it to import power when there is a local shortfall.
Texas has made a political choice to restrict cross-border. affiliations with other states to avoid oversight of its. electrical energy system by the Federal Energy Regulatory Commission. ( FERC).
In contrast to other states, Texas has likewise up until recently. avoided the concept of paying power plants to maintain extra. capability, instead of for the systems of electrical energy actually. produced.
To decrease overall expenses, the state has run an. energy-only market rather than a capability market too.
Rather than paying for reserve capacity that will be idle. for much of the year, Texas has depended on high wholesale rates. to motivate minimal generation and force load reductions at. times when margins are low.
Chartbook: Texas electrical power usage
ERCOT's balancing issues are especially severe during the. summertime, when daytime loads peak far greater than in the. remainder of the year as a result of comprehensive air conditioning.
But reserve margins can also be depleted in the spring and. autumn shoulder seasons, when lots of gas-fired, coal-fired and. nuclear generators are taken offline for maintenance.
Heatwaves that get here earlier than usual in the spring, or. occur behind regular in the fall, stretch power materials. due to the fact that lots of generators have actually scheduled regular downtime.
To rebuild reserve margins, dependability managers can provide. ' no touch' orders to generators and transmission owners. advising them to hold off any but the most immediate. upkeep.
If that still proves insufficient to increase reserve margins. to a healthy level, grid supervisors can order flat-out 'optimum. generation' from readily available units.
Eventually, the grid can look for numerous forms of voluntary. demand reduction; concern notifies calling for customers to conserve. electricity; and in the last resort by force disconnect loads on. a rotating basis.
HANDLING HEATWAVES
The proliferation of crypto-mining operations and data. centres, connected with huge loads, appears to have. turbocharged growth in electrical power consumption in 2022 and 2023.
Nevertheless, since of population and economic development, Texas. electricity usage has actually set records most years just recently,. regardless of whether the summer season has been particularly hot or. not.
Heatwaves have actually nonetheless extended resources to the limitation,. and required the grid to undertake amazing steps to improve. short-term generation and decrease load.
In recent weeks, ERCOT has been counting on no-touch orders,. a few of them consequently cancelled, to maximise the generation. and transmission resources readily available in durations of warm weather condition.
Last summer, it relied greatly on emergency situation signals broadcast. to consumers requesting for electrical energy conservation when reserve. margins were particularly low.
The state experienced a total of 2,687 cooling degree days. between May and September 2023, the second-highest on record. after 2011.
August and September 2023 were much hotter than normal,. forcing the grid to issue numerous alerts to generators and. customers.
But the mix of higher wholesale costs and duplicated. appeals for preservation appear to have actually blunted load growth. effectively.
The variety of cooling degree days was up by 23% in between May. and September 2023 compared to the exact same period in 2021, while. electrical power sales were only 16% higher.
It is simple to criticise ERCOT's duplicated balancing. problems, but the system's issues are those of rapid. development, so they are great problems to have.
ERCOT's grid managers have been effective at balancing the. system, provided the historical absence of a capability market and. the political unwillingness to adjoin with neighbouring. grids.
Related column:
- Texas population growth drives tape electrical power. use( August 15, 2023)
John Kemp is a market expert. The views expressed. are his own. Follow his commentary on X https://twitter.com/JKempEnergy.
(source: Reuters)