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Brazil's farmers are facing a rise in diesel prices as a result of the Middle East conflict.
The first and most immediate impact of the U.S.-Israeli attack on Iran is a spike in diesel prices. This will increase costs for Brazilian farmers harvesting record soybean crops?and planting corn that they can't afford to delay. Brazil imports around 30% of its diesel needs. This leaves farmers vulnerable as fuel prices rise along with global oil costs, said representatives from major agricultural groups. The conflict occurs at a time when the demand for diesel in Brazil is at an all-time high. Farmers are harvesting the remaining fields, hauling soybeans for market and finishing the planting of 'the second corn crop', which is the majority of corn produced in Brazil. Brazil is one of the world's biggest soybean exporters and corn suppliers, so any disruption in farm operations will have a significant impact on global grain markets. Officials from the industry said that these activities, as well as other fieldwork, such applying pesticides and fertilizers, are dependent on diesel. Diesel is currently the most important issue. "We saw oil moving from around $80 per barrel to $100 per barrel range and that has caused alarm among the countryside," Bruno Lucchi said, technical director of farm lobby CNA. On Monday, oil prices rose above $119 per barrel before falling back. Brent crude had risen by more than 7% at 2 pm local time and was trading close to $100 per barrel. Petrobras - which supplies the majority of the market - hasn't yet altered its prices, but you can already feel it. Some suppliers have allegedly restricted sales due to higher oil costs, causing problems for farmers in Rio Grande do Sul. Lucchi said that higher costs - or disruptions in -nitrogen fertilizer imported from Iran due to risks on the Strait of Hormuz - were manageable at this time because farmers already had supplies?for current season, and could delay any new purchases. Diesel is a more immediate problem. Cleiton Gauer, director at Mato Grosso's farm economy institute Imea said that producers needed fuel immediately to keep the fieldwork moving. Diesel and lubricants account for about 5% of farm costs, according to Gauer. Lucchi said he received reports that the price of gasoline had risen by as much as 1.5 reais per liter in some areas, especially those located in Brazil's southern and center-west regions. (Reporting and writing by Roberto Samora, Kylie Madry, Aurora Ellis).
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US considers easing Russian oil sanction to cool global prices surge, sources claim
According to sources familiar with Trump's plans, the administration may reduce oil sanctions on Russia in order to cool the surge in global energy prices caused by the U.S. and Israeli war against Iran. An announcement could be made as early as Monday. The U.S. would like to increase world oil supplies amid the'massive disruptions in Middle East shipments due to the expanding conflict. But this could also complicate its efforts to deny Russia revenue from its war in Ukraine. Sources who spoke on condition of anonymity said that the discussions could include a broad relief of sanctions as well as more 'targeted' options which would allow certain countries such as India to purchase 'Russian oil' without fear of U.S. tariffs or penalties. Last week, the United States allowed India to temporarily buy Russian crude oil that was already on tankers in the sea to help it cope with Middle East supply cuts. Sources said that the new measures could be announced as early as Monday. Taylor Rogers, White House spokesperson and a spokesperson for the 'administration,' called the war Operation Epic Fury. Rogers stated that "any policy announcements will be made directly by the President or his staff."
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Edison Utility wins shareholder lawsuit against LA wildfires
The parent company of Southern California Edison, which is based in Los Angeles, won the dismissal of a lawsuit that alleged 'it defrauded shareholders prior to wildfires in the Los Angeles area on January 2025 by claiming it had reduced the risk of loss from such catastrophes. Edison International was accused by shareholders of being "structurally incapable" to deal with extreme weather and implement the Public Safety Power Shutoff Program, which is a last resort measure to shut down powerlines when fire risk becomes too high. Shareholders also claimed Edison "falsely" promised that the program along with hardening electricity lines and trimming vegetation could reduce wildfire risks by as much as 90 percent. Edison's stock price dropped by around one third within a month after the wildfires. In a decision issued on Friday, U.S. district judge Otis Wright of Los Angeles stated that Edison's statements regarding its power-shutoff program are too vague to be relied upon, and that shareholders have not shown Edison's promise to reduce wildfire risks everywhere it serves. Wright wrote: "The PSPS statements are not perfect, even if they're read with a charitable eye for the plaintiffs." It would be illogical for a reasonable investor to assume SCE can use PSPS across all 38 transmission lines without an affirmation of complete or perfect loss-reduction. The judge said that shareholders can re-file their claims for?risk reduction. The lawyers for the shareholders have not responded to our request for comment on Monday. David Eisenhauer is a spokesperson from Rosemead-based Edison. He said: "We are in agreement with the court's ruling and remain committed to wildfire mitigation by grid hardening and situational awareness, as well as enhanced operational practices." The wildfires of January 2025 killed 31 people, destroyed or damaged over 16,000 buildings. Much of the damage was caused by the Eaton Fire in Altadena and Palisades Fire in Pacific Palisades. The U.S. Government sued Southern California Edison in September for causing the Eaton Fire to start and destroying National Forest System land.
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The US stock market is worried about the rising oil prices
The sudden surge of oil prices to above $100 per barrel has rattled U.S. investors. They are preparing for a sharper increase in energy costs that could further harm equities and stymie the economy. Investors continue to gauge the economic and market impact of the recent attacks on Iran. The U.S. oil price has risen by 50% to its highest level for more than three-years. Michael Reynolds, Glenmede's vice president of investment strategies, said: "It is a shock." "It is out of left-field, and people are trying to understand what it means as it unfolds." The Federal Reserve may be hesitant to lower interest rates if the Federal Reserve is concerned about rising inflation. Higher gas and oil prices will increase costs for energy-intensive businesses, reduce discretionary budgets and erode consumer discretionary spending. MARKET CORRECTION OR WORSE? Reynolds and other investors scrambled to come up with scenarios in case oil reached heights not expected just a few days before. Investors have noted that U.S. crude and Brent crude both broke through $100 a barrel on Monday. This level could cause more stock turbulence. At one point on Monday, the commodities were close to $120. U.S. crude oil settled at $67.02 in the last session of the U.S. - Israel strikes on February 27. Stock volatility has also risen. On Monday, the Cboe Volatility Index topped 30 for nearly a full year. It was below 20 in late February. The S&P 500 benchmark was down nearly 4% since its all-time high in late January, after paring earlier steeper declines in Monday's trading session. Last Tuesday, strategists at Yardeni Research predicted a 10% correction in the stock market. In a Sunday note, the firm stated that "we can't rule out" a bear-market and even a possible recession. OIL AND STOCKS - A Tighter Link Oil prices are rising and the movements have become more closely linked to the stock market. According to LSEG, the 20-day correlation of S&P 500 with U.S. Crude stood at -0.813 on Monday morning. This is a strong inverse relation that shows a tendency to move 'in opposite directions. The strategists at Deutsche Bank, who are watching to see if the Iran situation will?prompt an even larger risk-off movement, stated in a Monday note that the oil shock is "among the most serious in history," however, investors have priced in a "short rather than a protracted conflict." Stock investors, who typically think of oil and stocks as two separate markets, have historically followed oil's price trajectory closely, particularly after extreme price movements. Stock prices fell in early 2022 after oil prices jumped to $120 per barrel. This was due to the outbreak of conflict in Ukraine. Stock investors were concerned in 2015-2016 that the low price of U.S. Crude Oil, which dropped below $30 per barrel, was a sign for a general economic slowdown. Pain at the Pump for Consumers The focus is once again on the economic implications of rising oil costs. According to JPMorgan's economists, each 10% increase in oil prices will translate into a drag of 15 to 20 basis points on the GDP growth. The JPMorgan economists stated in a recent note that the effects could also be non-linear. Higher oil prices spikes would result in an even greater hit to growth. JPMorgan's economists and analysts warned that the economic impact would likely depend on how high crude prices remain. Currently, crude oil prices are rising. According to AAA, the national average price of gasoline increased to $3.48 a gallon Monday. It was $2.902 per gallon a month earlier. The group stated that this is "the highest level seen since summer 2024". Kevin Gordon, Charles Schwab's head of macro-research and strategy, said that oil prices were "as visceral" as filling your gas tank. In fact, the shares of companies that are most dependent on discretionary expenditures could be among those most susceptible to rising oil prices. Morningstar says that fuel costs for airlines account for 20 to 25 percent of their unit costs. The S&P 1500 index for passenger airlines is down 15 percent since the war began. One HEADLINE away from a Reversal? Higher oil prices can benefit certain parts of the market. Since late February, the S&P 500's energy sector has gained 1% while the broader S&P 500 fell over 2%. Some investors are concerned that the situation can change at any time. Raymond James Chief Investment Office Larry Adam stated in a?note on Monday that the firm expects the conflict will be "relatively brief." The firm's price target for U.S. Crude at the end of the year was $55 to $60 per barrel. Investors also pay attention to how Donald Trump, the U.S. president has shifted course in his tenure on policies that are market-sensitive. His softening of the blanket "Liberation Day", tariff policies in April last year was a major factor that led to a rapid rebound in asset prices. Gordon stated that "we're just one ceasefire agreement headline from this all reversing aggressively," (Reporting and editing by Colin Barr; Additional reporting by Chuck Mikolajczak, Siddharth Cavale and Lewis Krauskopf)
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LME will consider replacing warehouse rent cap with fixed daily loading rates
London Metal Exchange announced?on Monday? that the existing limits on'rent' charged by its warehouse network?could be replaced with a daily fixed rate of load-out. The LME may require that daily, 1.5% of the metal in its warehouses be loaded onto warrants - title documents conferring ownership. The current system reduces rent to 'zero' if a storage facility fails to deliver the metal required within 80 days. The consultation is open until May 8 and will look at exempting cancellations over 10,000 metric tonnages from the 1.5% requirement. This would ensure that larger warehouses do not feel discouraged from accepting more metal. When the owner plans to withdraw metal from LME's?system, warrants are canceled. Early 2025, it was reported that the LME would launch a consultation to "revise its storage rules" to "address warehouse gridlock". The exchange announced on Monday that it would also freeze rent and cap rates of free-on truck charges for another five years, from April 2027 until March 2032. The LME charges a fee called FOT (free-on-truck) to prepare metals for truck transport. Rent capping failed to prevent queues when large quantities of metal were?cancelled' for delivery. AUDITING REQUIREMENTS LME said that it would also like to hear opinions on whether "evergreen" rental deals should be discontinued. A company that places metal in an LME storage facility on warrant is entitled to a portion of the rent collected by the new metal owner. The consultation will also include a proposal that auditing requirements be extended to all warehouse operators. The current requirements only apply to warehouse companies with close ties to a?LME trading entity. The LME stated that it believes that forcing all warehouses to audit their barriers to information would be a good way to ensure?confidentiality in stock information. The consultation will also review the need to store aluminum indoors, and look at introducing a requirement for a copper certificate of analysis. Copper is currently the only metal that does not require one when placed on warrant. Reporting by Tom Daly, Pratima Deai and Jonathan Ananda; Editing Diti Pujara
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Dubai Gold Trades at Discount to London Due to Flight Disruptions
Analysts and traders say that gold in Dubai trades at a lower price than in London due to flight restrictions caused by the conflict in the Middle East. Demand is also subdued because of the uncertainty over the length of the war. The U.S. and Israeli war against Iran has caused widespread cancellations of passenger flights across the Middle East. This has disrupted the flow of gold through Dubai, a major trading hub that supplies Switzerland, Hong Kong, and India. A Dubai-based dealer said, "The market is still at a discount. However, in thin trade, the variations are wide. They range from $10 to $30 an ounce." The dealer said that demand is low in India, which is a major consumer of bullion, as well as the Middle East. Price volatility is also causing buyers to put off purchases. Spot gold prices in London are down by 6% from the initial spike that occurred at the beginning of the conflict, on February 28. Bullion prices were last $5,109 for a troy ounce while oil prices rose. Nicky Shiels is the head of metals strategy for MKS PAMP. He said that there are still many unknowns, including conflict duration, escalation, and macro inflation. Gold also faces more volatility. Shiels said, "Loco Dubai Gold's trading at a discount to London is telling as the 2011 Arab spring?saw steep discounts in the region." Analysts at Heraeus say that the markets' reaction to the conflict in Middle East was?less extreme? than thought. This could imply?that there is a consensus view that the conflict will not last long. Analysts noted that when Russia invaded Ukraine in February of 2022, gold prices rose for two weeks, but then retreated. The year ended with little change as the sideways trend took hold, they added. Reporting by Rajendra J. Jadhav, Polina D. Devitt and Diti P. Pujara.
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In coordinated raids in northeast Nigeria, 15 militants islamists are killed
Residents and military sources said that Islamist militants have killed at least 12 soldiers in coordinated attacks in the northeast of Nigeria. The attacks against armed forces are intensifying. Aid groups report that a 17-year Islamist rebellion in the?the?region has resulted in thousands of deaths and 2 million displaced people, despite major campaigns. The attacks in Kukawa and Dalwa, as well as Goniri, came just days after an attack on a military post in Ngoshe. This shows the ability of militant groups to strike multiple fronts at once. Boko Haram fighters and Islamic State West Africa Province, (ISWAP), swept into Kukawa District in Borno State before dawn on Monday. They pushed towards the nearby camp in a 3-hour battle. A?military?source' said that troops retook camp, but not before killing the commanding officer as well as five other soldiers. Karta Maina ma'aji Lawan confirmed the attack and the death of the officer. Shetima Isa, resident and traditional leader in Dalwa, reported that militants had allegedly killed two soldiers, three residents and set more than 250 houses ablaze. Another soldier reported that insurgents attacked the Goniri base of the Yobe state neighbour, killing four soldiers, and setting buildings and vehicles ablaze. Sani Uba, a military spokesperson, said that troops had repulsed several coordinated attacks against?military locations in the northeast and that all areas remained under firm control. Uba stated that "unfortunately, some brave and gallant soldiers, including an outstanding Kukawa officer, paid the ultimate cost" in the engagements. He said that ground forces were accompanied by air support in conducting follow-up missions in the affected area, and cordon-and search missions were continuing?in nearby village where wounded militants are reported to be hiding. Nigerian military raids have increased this year in an effort to renew the offensive against the insurgents. However, ISWAP and Boko Haram are continuing to exploit the difficult terrain, porous borders, and thin state presence throughout the northeast. The latest attacks occurred just hours after military analysts had warned that an ISWAP attack was likely. (Reporting and writing by Ahmed Kingimi, Elisha Gbogbo, Editing by Andrew Cawthorne).
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Aluminium reaches four-year highs due to Middle East shipping disruptions
Aluminum prices reached four-year-highs on Monday as fears about prolonged shipping disruptions due to the U.S./Israeli war in the Middle East fueled a concern over supplies of the metal. Benchmark aluminium was down?1.5% to $3,394 per metric ton by 1711 GMT, from $3,544 earlier. This is the highest price since March 2022, when the metal prices for transport, construction, and packaging reached a record of $4,073.50. The conflict in the Middle East virtually closed the Strait of Hormuz, through which aluminum produced in that region is shipped to the U.S.A. and Europe. Ed Meir, Marex analyst, said that the Europeans were particularly worried by this Gulf Aluminum stoppage as it coincides with Mozal's planned shutdown in October. "Some producers want to draw down stock from outside the area to fulfill their obligations. But?we suspect that this will be difficult due to the high concentration of Russian metals on the exchange, which are currently sanctioned. And the low levels of inventories in general." In December, South32 said its 560,000-metric-ton-per-year capacity Mozal smelter would be placed on care and maintenance from mid-March, after talks with utilities and Mozambique's ?government failed to yield a new power deal. Concerns about supply have turned the contango or discount for the cash aluminum contract?over the next three months into a premium. On Friday it climbed to $47.4 per tonne, its highest level since February 2022. It was previously around $22 per tonne. The prices of aluminium on the curve of?maturity going out to 2036 have been backwardated. The soaring?oil prices have also impacted the demand for industrial metals, as well as the dollar's strength. Copper rose?0.6%, to $12,943 per ton. Zinc rose 0.9%, to $3,327. Lead fell 1%, to $1,933. Tin rose 0.3%, to $50,235. Nickel lost 0.5%, to $17.385. Reporting by Pratima Dasai. Mark Potter, Tomasz Janowowski and Mark Potter edited the article.
How could Trump combat the rise in oil prices?
U.S. president Donald Trump will review a number of options as soon as Monday to tame the oil prices. They have soared since 2022 due to the U.S. and Israel?war against Iran.
Some options could spark domestic and international opposition.
The stakes are very high. The stakes are high.
Here are some options that?Trump? could choose from:
SALE OF OIL FROM STRATEGIC OIL RESOURCES
Trump can order the sale of oil in the U.S. Strategic Petroleum Reserve, and coordinate with partners and allies on a worldwide release. The goal would be to lower prices by increasing the supply.
SPR in the U.S. currently has more than 415,000,000 barrels. This is more than four full days of oil consumption worldwide. The SPR is at its lowest since the mid-1980s, after Trump's predecessor Joe Biden sold more than 200,000,000 barrels of oil in 2022, when Russia invaded Ukraine.
Fatih Birol, the head of the International Energy Agency (IEA), told G7 Finance Ministers on Monday that IEA member countries hold over 1.2 billion barrels in public emergency oil reserves and a 'further 600,000,000 barrels are industry stocks under government obligation. The IEA has called for a coordinated oil release, and the G7 nations have agreed to closely monitor energy market developments.
There has been no release yet.
In the Strait of Hormuz, what is the insurance for a tanker?
Around 20% of daily world oil consumption transits the Strait of Hormuz, off the coast of Iran. Marine insurers have cancelled war risk coverage due to the conflict, which has led to a halt in most tanker traffic.
The U.S. announced on Friday that it would offer up to $20 billion of reinsurance to tankers who have anchored in the narrow waterway. Analysts say that the plan is limited in its ability to solve the problem.
JPMorgan Chase analysts have said that the insurance programs are far too small. They estimate the need to be about $352 billion. The administration has claimed the analysis was flawed.
Analysts say that ship owners are more concerned about the real security risks. Shipping officials say they don't expect to see a large-scale return of oil flows in the Strait until after the war.
TAX HOLIDAY
Waiving federal taxes could help reduce the price of gasoline. The U.S. government charges 18.4 cents for each gallon, and more for diesel. The full amount would save a little more than 5% on the average national retail price for gasoline, which is $3.48.
This move will also reduce funding for the Federal Highway Trust Fund, which pays highway maintenance and mass transportation.
WAVE RULES ON FUELS
The U.S. may temporarily suspend the pollution regulations on fuels that add to the price of gasoline. Pump prices may fall if refiners pass on the savings.
Refiners in the United States are preparing to produce summer-grade gas and other fuels, which produce less pollution during warm weather. These blends cost more to produce but the savings from a relaxation of rules will be modest.
In 2024, a U.S. Energy Information Administration report suggested that refinery restrictions tied to summer gas production could cause retail prices to rise by around 10 cents per gallon in tight market conditions.
The communities that are concerned about the effects of more pollution-causing gas formulations may be enraged by the easing of the pollution regulations.
EXPORT RESTRAINTS
The White House may impose restrictions or a ban on U.S. crude oil exports and other fuels, such as gasoline, in an effort to lower prices for consumers at home.
Top energy industry groups have opposed such a?move in times of energy shortages, like after Russia's invasion in Ukraine in 2022. Biden didn't impose these restrictions.
A similar move is not clear. The U.S., the world's biggest oil producer and net exporter, is not equipped to refine U.S. crude grade. This means that they will still have to import it from abroad.
ELIMINATE SANCTIONS on more Russian oil
U.S. Treasury secretary?Scott Bessent stated on Friday that the U.S. may ease further sanctions related to Ukraine on Russian oil in order to increase global supply.
His comments came just a day after Washington granted India a 30-day waiver to allow it to purchase Russian crude oil currently stranded on the sea. If done long-term, it could be criticized for helping Russia fight Ukraine.
WAIVE THE JONES ACT
The Trump?administration may temporarily waive the Jones Act. This law requires that all cargo transported between U.S. ports be carried by tankers made in America using unionized labor.
The law's repeal could allow companies to have more flexibility when transporting oil from the Middle East to U.S. coast refineries. This includes being able to hire cheaper ships without unionized labor.
The law is more than 100 years old and has broad support from unions across the country. This could make it politically sensitive.
Futures Market
A White House official revealed last week that the U.S. had considered trying to control oil prices via financial markets, such as futures contracts. There were few details on how this would work.
(source: Reuters)