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Oil prices fall below the seven-month highs as traders focus on U.S. Iran talks and trade policy
Oil prices were below a seven-month high as traders weighed the uncertainty surrounding U.S. Trade Policy and the prospects for U.S. Iran nuclear talks in light of heightened Middle East tensions. Brent crude futures fell 9 cents or 0.1 percent to $71.40 per barrel at?0120 GMT. This follows a volatile session on Monday, when it reached its highest level since the 31st of July, $72.50, while alternating between gains and losses exceeding 1%. U.S. crude oil futures fell 11 cents or 0.2% to $66.20 per barrel. This is after the previous session saw a rise to $67.28 - the highest level since August 4. Daniel Hynes, ANZ analyst, stated in a report that "Crude Oil Markets Remain on Edge" as U.S.Iran Talks resume this Week. The renewed tensions in the trade war also affected sentiment. Badr Albusaidi, Oman’s Foreign Minister, said that Iran and the U.S. would hold a third nuclear round on Thursday at?Geneva. The United States wants Iran give up its nuclear program, but Iran has adamantly "refused" and denied that it is trying develop an atomic bomb. A senior State Department official announced on Monday that the State Department was removing non-essential government staff and their families from the U.S. Embassy in Beirut. This is due to growing concerns over the possibility of a war with Iran. In a post on social media, Donald Trump stated that if Iran does not reach a deal it would be a very bad day for Iran. Tony Sycamore is an IG analyst and he wrote to clients that crude oil was still at the top of the trading range between $55 and $66.50, which has defined the last six months. A sustained break above the top of the range will open the door to further gains towards $70.00-$72.00. In contrast, signs of deescalation would likely lead to a retracement towards $61.00." Trump warned on the trade front that countries should not back away from recently negotiated trade deals with the U.S., after the Supreme Court ruled against his emergency tariffs. He said he would hit these countries with higher duties under different laws. Trump announced on Saturday that he will increase a 'temporary tariff' from 10% to 15 % on all?U.S. Imports from any country will be taxed at the maximum level permitted by law. A Ukrainian official confirmed that drones had struck a Russian pumping facility serving the Druzhba pipeline, which was set up in order to transport crude oil from Moscow to Eastern Europe. (Reporting by Anushree Mukherjee in Bengaluru; Editing by Kevin Buckland)
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Asia stocks fall as Wall St sell-off undermines confidence
The Asian stock market stumbled in the early hours of Tuesday's trade as investors were rattled by a selloff on Wall Street overnight. MSCI's broadest Asia-Pacific share index outside Japan reversed from gains to losses after a six-day rallies. It was down by 0.2% at the end of last week, with South Korea leading the declines. Nikkei gained 0.7% after the Japanese markets returned from a long holiday. S&P 500 futures e-mini were up by 0.1%. In a recent research report, Bernstein analysts wrote that the stock market's momentum has been "under pressure" due to increased concerns about?the AI Trade and escalation of geopolitical uncertainty and trade. Trump warned countries on Monday not to back away from recent trade agreements with the U.S., after the Supreme Court overturned his emergency tariffs. He said he would impose much higher duties if they did so under different trade laws. The new tariffs were based on Section 122 of Trade Act of 1974. This has caused further confusion among markets that are trying to understand the protectionist policies of the United States. The Nasdaq Composite fell 1.1% overnight, due to fears about the effects of AI in software and other industries. Citrini Research's bearish report on possible risks to global economic growth has further weakened investor sentiment. The CBOE Volatility Index (VIX), also known as the CBOE Volatility Index rose by 1.9 percentage points, to 21.01. Japan and China return from their holidays on Tuesday. This adds to the liquidity in regional markets. The U.S. Dollar was 0.1% higher at 154.77 Japanese yen against the yen. In offshore trade, the Chinese yuan remained unchanged at 6.889 Yuan. Fed funds futures have a 95.5% implied probability that the U.S. Central Bank will stay on hold during its next two-day meeting on March 18, little changed from the day before, according to CME Group's FedWatch. Investors pondered on the impact of the Supreme Court decision regarding U.S. tax receipts. The yield on U.S. Treasury bonds was up by 0.6 basis points?at 4,029%. WTI crude fell 0.1% on the commodities market to $66.23, while tensions between Iran and the U.S. continued to simmer. A senior State Department official announced on Monday that the Department is removing non-essential personnel from the U.S. Embassy in Lebanon and their family members who are eligible. This comes amid increasing concerns over the possibility of a war. This unease has pushed gold, the safe haven, up by 0.3% to $5244.96, while Silver fell 0.1% to $88.12. Bitcoin rose 0.4% to $64,832.48, whereas ether fell 0.1% to $1,861.22. (Reporting and editing by Shri Navaratnam.)
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McGeever: Watch out for the oil's disinflationary drag disappearing
Since mid-2024, oil prices have consistently been a disinflationary factor for the U.S. economy and global economy. This may soon change. Brent and West Texas intermediate crude oil futures are at their highest level in almost seven months, fueled by signs of an economic?upturn? at the beginning of the year as well as simmering tensions between the U.S. and Iran that could lead to a military conflict. WTI rose to?above $67 per barrel on Friday, and Brent reached $72, bringing their gains for the year so far?to?around 15%. More importantly, from an inflation-calculation perspective, oil's rise means the year-on-year increase is dwindling rapidly, to the point that Brent is now only 2% cheaper than it was a year ago. Early January, the price was almost 30% lower than it had been a year ago. The so-called base effects of oil are on the verge of switching from deflationary to inflationary. Since August 2024, oil's base effects are mostly negative and have a downward influence on inflation rates. It may become harder for the Federal Reserve, if this changes, to justify interest rates cuts. The Fed targets an annual "core" inflation rate. However, higher oil prices raise the cost of goods and services. Some of this is paid by consumers. Is inflation going the wrong way? Crude prices are still important, even though oil's influence on U.S. inflation and economic activity has waned over the past decade as manufacturing and industry have declined. Transport, including motor fuel costs, accounts for around 16% in the total monthly basket of goods. This is higher than any category, except shelter. A sustained rise in oil prices will still have a significant impact on inflation. In 2023, a Fed paper found that the second round effects of a 10% permanent increase in oil prices would lift the headline CPI in non-U.S. developed economies by nearly 0.4%. Gregory Daco is the chief economist of?EY Parthenon. He estimates that an increase in oil prices by $10 can boost annual inflation rates in the United States by as much as 0.2 percentage points. This doesn't seem like much. Oil is up $10 already this year and the?U.S. The Fed's preferred measure of inflation has the rate at around 3% and is creeping up. Could an unexpected oil-driven increase in inflation cause the Fed to adjust its interest rate? Raphael Bostic, the Atlanta Fed president who is leaving his post on Friday, told an event organized by the Birmingham Business Journal that if the Fed's target of 2% inflation was threatened to be "runaway", then rate increases might be necessary to maintain the Fed's credibility. If it starts to move in the opposite direction again, that would be super concerning and you would have to raise your prices. If it moves in the opposite way again, that would be very concerning and you would need to consider raising the rates," said Bostic who is retiring at the end this month. Short-term Oil Outlook Bullish We are not yet in a state of full-blown oil crisis like the ones that occurred in the 1970s and few expect to see such a situation. Oil is facing a fundamental issue of oversupply, which should limit any price increases. Analysts at JPMorgan estimate production cuts of up to 2 million barrels a day would be required just to avoid "excessive oversupply" next year. It is possible that a U.S. - Iran conflict could cause some supply disruptions, but this would be tolerated or offset by other producers. Traders are still jittery. Since early January, when Washington began to 'intensify its anti-Tehran rhetoric, the price of a barrel of crude has risen by around $10. A full-scale conflict with Iran would increase the premium, even though it is a low probability scenario. This is because roughly 20% of global oil production passes through the Strait of Hormuz - a narrow shipping route between Iran and Oman. Even if the premium was to rise, that does not automatically mean inflation will rise. There are other price pressures. Not least, there is potential relief after Friday's U.S. supreme court ruling against President Donald Trump’s tariffs. Inflation signals are not as clear from the rest the global commodities complex. While some commodities like wheat and corn are cheaper today than a year earlier, others like copper and metals are much more expensive. Oil's potential to become an inflationary booster, rather than a deflationary drag will be a reason for policymakers to pay close attention to the Gulf news. You like this column? Check out Open Interest, your new essential source for global financial commentary. Follow ROI on LinkedIn and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets seven days a weeks.
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ONEOK's quarterly profit drops as the gas segment is affected by pipeline divestiture
ONEOK, a U.S.-based pipeline operator, reported a drop in profit % per share for the fourth quarter on Monday. This was due to a'sharp decline in earnings from its natural gas & transportation segment that is linked to a 'divestiture in 2024 of a 'interstate pipeline network. In extended trading, shares of the company fell 2.8%. ONEOK was also affected by low oil prices in the quarter ending December 31 as geopolitical risk outweighed concerns over an oversupply. Benchmark Brent crude averaged $63.13 per barrel in the quarter, down 11.3% compared to a year ago. The fall in oil prices has put pressure on the midstream service providers, such as ONEOK. The Tulsa-based?company saw its earnings per share drop to $1.55 from $1.57 a quarter earlier. The adjusted?quarterly core profits for the Natural Gas Pipelines unit fell?to $261 from $417 millions a year ago. According to the company, the divestiture of its pipeline network was responsible for $264 million in losses. The segment's adjusted quarterly core profit fell by about 6%, to $567.8 million. The?company’s core profit in the quarter for its natural gas liquids segment rose 4% compared to a year ago, while the natural gathering and processing segment saw a 10% rise. ONEOK estimates a net income for the current year between $3.19 'billion and $3.71 'billion. The midpoint is below analysts average estimate of $3.65 bn, according to LSEG data. ONEOK's 60,000-mile network of pipelines transports crude oil, refined products, and natural gas. Over the past two years, the company has acquired a Gulf Coast NGL Pipeline System from Easton Energy as well as Medallion Midstream, EnLink Midstream, and Medallion Midstream. (Reporting and editing by Jonathan Ananda in Bengaluru, Pooja menon and Sumit saha from Bengaluru)
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Heavy rains in southeast Brazil cause at least 14 deaths
The local city hall reported that at least?14 deaths and 440 displaced people were caused by heavy rains in the southern?Brazilian?city of Juiz de fora on Tuesday. According to the authorities, rain caused flooding and landslides. Classes in municipal schools have been suspended. Specialized teams have been mobilized in response to incidents and to search for missing persons. The city hall said in a press release that federal and state agencies were called to help the Minas Gerais city, which had declared a "state of public catastrophe". Many parts of Brazil experience the rainy season's peak during local summer from December to February. This is characterized by frequent downpours and thunderstorms as well as flooding and mudslides. The city hall of Juiz de Fora said that this was the wettest February ever in the history of the city, with rain?already?more than twice the amount expected for the?month. In a social media statement, Mayor Margarida Salomao stated that the situation was "critical". The National Institute of Meteorology of Brazil issued heavy rain alerts on Tuesday for parts of 14 different states. This included?the entire area of Minas Gerais and Rio de Janeiro. (Reporting Rodrigo Viga Gaier in Rio de Janeiro, Isabel Teles and Gabriel Araujo in Sao Paulo; Editing by Chizu Nomiyama )
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Police say that gunmen killed five Pakistani police officers and two civilians near the Afghan border.
Gunmen ambushed and killed two civilians and five police officers in a northwest Pakistani police vehicle on Tuesday. The South Asian nation is struggling to contain a wave militant attacks, and has renewed tensions along its border with Afghanistan. Ambush at 'Kohat City, located along the border of Afghanistan, follows a day-long drone attack and gun attack that killed three paramilitary soldiers in Karak, a nearby city. "Several gunmen attacked ?a police patrol. Five policemen, including a senior officer, were killed. "They also burned the vehicle," said a police spokesperson. He said that two civilians who were injured in the attack have died in hospital. No group claimed responsibility for either attack. Pakistan launched airstrikes in Afghanistan Saturday, at the beginning of the Muslim holy week of Ramadan. The strikes were aimed at what Pakistan said was militant targets that had been responsible for recent suicide attacks on Pakistani soil. Kabul and UN have said that at least 13 civilians were killed in the air strikes. Islamabad claims that militant groups are being given sanctuary in Afghanistan where they plan and execute attacks on the other side of the border. Afghanistan denies the charge, saying that the militancy in Pakistan is a Pakistani problem. Zabihullah Mojahid, a Taliban government spokesperson, said that Pakistan's attack on Afghanistan was a terror act which targeted civilians and violated Afghanistan's sovereignty. Since 2007, the Tehreek-eTaliban-Pakistan (also known as the Pakistani Taliban) has been fighting against the state in the districts bordering Afghanistan.
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Copper falls from a one-week peak as inventories increase, and confusion surrounds tariffs
Prices of copper fell on Monday as inventories continued to rise. Investors were also unsure about the future of U.S. Tariffs and Chinese Trading ahead of reopening following a holiday. Benchmark three-month Copper on the London Metal Exchange fell 0.9% to $12,843 per metric tonne by 1700 GMT. It had earlier reached a session high of more than $13,050. LME copper is up about 3% in the last four sessions but still far below its record high of $14,57.50 on January 29, which was reached. The fact that there is more inventory outside the U.S. may be a little dampener and indicate some softening in demand, said Nitesh Sha, commodity strategist at WisdomTree. It's hard to tell if it's inventory moving from off-exchange warehouses (warehouses), or a general weakening in demand. Data showed that copper stocks in LME approved warehouses increased by 6,675 tonnes to 241,825 tons, which is the highest level since March 2025. They have risen 70% this year. The dollar, equity and metals markets were all affected by the uncertainty created after the U.S. Supreme Court overturned President Donald Trump's emergency duties on Friday. Trump then announced a temporary 15% tariff on U.S. imported goods from any country and warned countries that they would be worse off if?trade agreements are scrapped. The Shanghai Futures Exchange was also closed during the Lunar New Year holidays. Traders waited for it to reopen Tuesday. The Chinese will be a big factor in determining whether or not there is an increase in domestic demand. Robert Montefusco, Sucden Financial, said that we'll need to wait and watch on this one. LME nickel fell 0.3% to $17300 per ton. This was a loss of earlier gains. An official from top producer Indonesia stated that it would consider revoking an environmental permit of a particular company following a landslide at its nickel processing hub. Other metals saw LME aluminium drop 0.4% to $3.091, zinc fall 0.9% to 3,353, lead dropped 0.6% to 1,952.50 and tin jump 2.5% to $48,735. (Reporting and editing by Hugh Lawson. Jan Harvey, Ros Russell, and Eric Onstad)
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US Supreme Court will hear Exxon's and Suncor's bid to dismiss Boulder's climate lawsuit
The U.S. Supreme Court has agreed to hear ExxonMobil and Suncor Energy's bid to quash a lawsuit filed by Boulder, Colorado officials who want to hold oil companies responsible for climate change. The Supreme Court heard an appeal from the companies against a ruling of the lower court that allowed the lawsuit to proceed. The lawsuit alleging violations of state law by the companies seeks unspecified damages for "costs incurred" by Boulder in mitigating climate change. Boulder is just one of the dozens of climate-related cases filed by U.S. states against companies that produce, extract, distribute, or sell fossil fuels. Burning fossil fuels releases greenhouse gasses such as carbon dioxide, which traps more heat from the sun, leading to an increase in global temperatures over time. In their lawsuit filed in 2018, Boulder officials accused Exxon, based in the U.S. and Suncor, based out of Canada, of misleading the public regarding the role their products played on climate change. They also claimed that they were profiting off unchecked sales of fossil fuels. The companies deny any wrongdoing. Plaintiffs claim that oil companies must cover the costs of past and future actions taken by city and county governments to reduce the impact of climate change. They cite infrastructure repairs, environmental damages, emergency management, and harms caused to public health. The companies asked lower courts to dismiss this case. They argued, among other things, that Boulder's lawsuit would interfere illegally with federal regulations of greenhouse gas emission under the?Clean Air Act?. In May 2025, the Colorado Supreme Court denied their request. This prompted an appeal to the U.S. Supreme Court. The Trump administration has backed the appeal of the oil companies. The Supreme Court rejected a similar request by Sunoco, and other oil companies, to dismiss a climate-related suit by Honolulu. Hawaii's highest court had allowed the case to proceed. The lawsuit aims to hold the companies responsible for their alleged role in contributing to extreme weather in the region as well as an increase in the average sea-level along the Honolulu Pacific coast, which is linked to flooding and erosion.
Wall Street futures fall and gold rallies amid Trump tariff turmoil
Wall Street futures, European stocks and gold rose on Monday amid confusion about U.S. Trade Policy. This was after President Donald Trump announced that he would impose a 15% tariff following the Supreme Court ruling against his global levies.
As investors tried to understand the impact on major economies around the world, shares in Hong Kong rose on the belief that U.S. Tariffs on China may fall.
The U.S. Supreme Court ruled against Trump's emergency tariffs Friday. This led the president to announce a 10% tariff on the rest the world. He then increased it to 15% the following day.
Rodrigo Catril is a senior FX Strategist at NAB. He said, "The tariff landscape has become more uncertain. Uncertainty is bad news for any market or economy."
"Unless common sense prevails we could enter a circular process in which new tariffs announced are then possibly overturned only to have new tariffs announced and we do it again."
After a dip of up to 1%, S&P futures dropped 0.54%. Nasdaq's futures declined 0.59%.
The U.S. Stock Markets will also be tested by Nvidia's earnings later this week. This is because the chip designer accounts for almost 8% in the S&P 500 Index.
Silver rose 2.8%, to $87 an ounce. Gold climbed by 1.2% to $5163 per ounce.
The STOXX 600 index in Europe fell 0.35%. Germany's DAX dropped 0.62%, but Britain's FTSE 100 was slightly higher.
Tomas Hildebrandt is a senior portfolio manager for Evli, in Helsinki. He said that Trump will remain Trump.
"There may be some relief to some European exporters but the Trump administration's tough anti-European attitude isn't going away."
AVERAGE TARIFF RATES DROPS
There was no clear indication of when the new tariffs were to be implemented, what would be excluded, and if every country would have to pay a rate of 15%. Some countries, such as the UK and Australia had tariff rates of 10% under the old rules, while other Asian countries had rates higher than that.
Yale Budget Lab reported that the average effective tariff rate would be 13.7% following Trump's announcement of Saturday. This is down from 16 percent, the highest level since 1936, before the Supreme Court ruling.
The Trade Act of 1974 is the legislation that will determine the tariffs. If this is the case, then the average rate will fall to 9.1%.
Dollar fell in Asian trading and early European trading, but was flat last as investors grappled with policy uncertainty.
Both the Swiss Franc and Japanese Yen, which are considered safe havens, rallied briefly before falling back. The dollar was unchanged at $1.1778 for the euro.
The MSCI 'Asia' index, which excludes Japan, rose 0.78%.
Hong Kong's Hang Seng Index rose 2.53%, partly because of expectations that China would?face lower duties after the ruling. Goldman Sachs analysts said China's tariff rate could fall by 6.6 percentage points.
The Nikkei closed for the holiday, but futures prices fell by 0.38%.
Brent crude oil?rose by 0.15%, to $71.78 per barrel. This is a continuation of the gains made last week after Trump announced that the U.S. would strike Iran in response to a massive buildup of military forces in the area. On Thursday, further U.S. and Iran talks will take place.
The yield on the 10-year U.S. Treasury fell by a basis point, to 4,075%. Prices and yields are inversely related. (Reporting from Harry Robertson, London and Wayne Cole, Sydney; Additional reporting provided by Danilo Maroni in London; Editing done by Lincoln Feast and Susan Fenton.
(source: Reuters)