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EIA data show that US oil production fell to its lowest level in two years during the January winter storm.
The Energy Information Administration reported on Tuesday that U.S. crude oil production fell the most in two years last month following a'severe winterstorm' which knocked production offline?in large parts of the country. The EIA data showed that U.S. crude output dropped 410,000 barrels a day in January, compared to the previous month, to 13,25 million barrels a day, the lowest level since February 2025. The EIA reported that the total U.S. crude and petroleum product consumption fell by 201,000 barrels per day in January to 20.7 millions bpd, which is the lowest level since November '2025. The demand for gasoline dropped'sharply' during the winter storms of January. The EIA's measure for demand for motor gasoline finished fell by 501,000 bpd in a month. This is the lowest level since January 2022. Retail gasoline prices topped $4 per gallon on Monday, as the Iran War upended the global oil markets. This could put more pressure on fuel demand in the U.S. In January, the demand for distillate fuels (diesel and heating oil) increased due to unusually cold temperatures. The EIA data revealed that the average amount of distillate fuel products supplied in January was 4.03 million bpd, an increase of 213,000 bpd from month to month. This is the largest increase in over a year. (Reporting and editing by Chris Reese, Will Dunham, and Shariq Khan from New York)
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Nikkei reports that Japan and France are considering a rare earths agreement to reduce China's reliance
The Nikkei reported on Wednesday that the French President Emmanuel Macron and Japanese Prime Minister Sanae Takaichi will create a roadmap to 'diversify supplies of rare Earths and other essential minerals. According to the report, a joint declaration expressing concern about export restrictions for critical minerals will be issued by both leaders. Could not verify immediately the information contained in the report. Nikkei reports that the Japanese and French governments are planning to launch a public-private partnership in southwest France by year's end to refine heavy rare earths, which can be used for electric vehicle motors as well as other technologies. The report said that both Takaichi, and Macron would?confirm' this plan and others to build rare earths independent supply chains from China. The deal is timely, as Japan, Western governments, and manufacturers are scrambling for supplies of 'rare earths minerals' to reduce their dependence on China, which is the dominant supplier and producer of 'rare earths. In March, Japan Australia Rare Earths (co-owned by the state-run Japan Organization for Metals and Energy Security and Sojitz Corp) struck a deal to supply Australia's Lynas Rare Earths - the world's largest rare earths producer outside China. Japan Australia Rare Earths has committed to buying half of the total production of heavy rare Earths. On March 20, the U.S., Japan and other countries released an action plan to develop alternatives to China in the?critical mineral and rare earths supply chain. The initial focus was on pricing floors for select minerals. Japan and France will also cooperate in the space sector. Companies from both countries are expected to sign Memorandums Of Understanding on 12 joint projects. These include space debris removal, rocket launches, and space debris removal. The report said that the Japan Aerospace Exploration Agency, (JAXA), and CNES, France’s space agency, would?provide financial support for corporate space technology developments, offering capital to businesses from their respective countries who take part in joint project. (Reporting by Rajasik Mukherjee & Nichiket Sunil in Bengaluru; Editing by Shailesh Kuber)
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Gold is up over 3% but it's on track to be the worst month for gold since 2008.
Gold was up on Tuesday but still on course for its'severest monthly decline' since October 2008 as inflation fears and expectations of higher interest rates due the Iran War weighed heavily on the metal. By 1:31 pm EDT (1731 GMT), spot gold had risen 3.2%, to $4652.31 an ounce. This was the highest price since March 20. U.S. Gold Futures closed 2.7% higher, at $4678.60. The U.S. Dollar slipped but was still on track for a gain of 1% per month. A stronger dollar increases the price of greenback-priced gold for holders of foreign currencies. The current gold rally is encouraging, and it's due to increased optimism regarding de-escalation of the Middle East. "I need to see more upside performance before I can say that this is a pattern to continue," said Peter Grant. "In the longer term, the underlying trends remain bullish and the key fundamentals such as de-dollarization and the central bank buying of bonds are still in place." The Wall Street Journal, citing officials in the administration, reported that Donald Trump would be willing to end his military campaign against Iran, even if the Strait of Hormuz remained largely closed. U.S. defense secretary Pete Hegseth warned Tehran to make a decision soon in the war with Iran. The price of spot gold fell 11.8% in march as the Middle East war?weighs on bullion. Energy prices have risen dramatically, causing inflation fears to increase and for markets to reassess their expectations of interest rates. High rates increase the opportunity costs of holding metal, despite it being a hedge against inflation and uncertainty. Goldman Sachs and BMI both forecast that the price of gold will reach $5,400 per ounce by 2026. Spot silver increased 6.7%, to $74.64, however it was down 20.4% in the last month. BNP Paribas analysts expect silver to trade in the range of $65-$75 per ounce until 2026, and that physical markets will be surplus by 2027. Palladium rose by 5.2%, to $1,479.25, and platinum gained 3.1%, to $1,958.05. Both metals are on course for a monthly decline. Ashitha Shivprasad, reporting from Bengaluru and Paul Simao, editing by Tasim Zahid
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OMV Plastics CEO: Profits will increase dramatically for the giant plastics company
Alfred Stern, CEO of Austria's OMV said that the giant new plastics group Borouge International is a significant step towards increased profitability. He added that a listing was expected to take place in 2027. The new group was completed on Tuesday and was created by combining ADNOC with OMV subsidiaries, along with the acquisition of NOVA Chemicals. Stern stated that the group is expected to have higher margins than average and a stronger price premium compared with other companies in the market. Stern stated that around 70% of the production is based upon low-cost raw materials, while premium products enjoy an average price premium of 18%. EARNINGS ARE ALREADY HIGH, AND WE EXPECT THEM TO RISE Borouge International, based on its existing companies, would have had a margin of earnings before interest tax, depreciation, and amortisation?of about 25% in the past five years. OMV, the Austrian group that combines oil, chemicals and gas, reported profits higher than expected earlier this year. The chemicals division was a major contributor to these results. In order to launch Borouge International in 2026 with a solid balance sheet and an investment grade rating, OMV and ADNOC have said that they would forgo the half of their dividend. Stern stated that this will not change OMV's dividend policy. In the beginning, it was planned to list Borouge International in this month around the time of the company's formation. The company denied that the delay was directly related to the Middle East conflict, saying they were simply trying to choose the best date for their shareholders. Stern stated that the company is now targeting a 2027 initial public offering through a three stage process. Borouge's existing shares will first be exchanged and then listed in Abu Dhabi, at the same time that a capital increase is being carried out to allow its inclusion in the MSCI Emerging Markets Index. Borouge International's headquarters will be in Vienna where a secondary IPO has been planned. In a press release?on Tuesday, it was stated that the merger would generate synergies worth at least $500 million, with 75% occurring within the first 3 years. However, the statement did not provide details as to how this would be achieved. Borouge International will have a production capacity of more than 12,000,000 metric tons per year, placing them in the fourth position globally. In Abu Dhabi, new plants are expected to be commissioned this year. This will add 1.4 million tonnes of additional capacity. Reporting by Alexandra Schwarz Goerlich, writing by Maria Rugamer. Editing by Olaf Brenner, Barbara Lewis and Barbara Lewis.
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War and weather focus on March gains for EU wheat
Euronext Wheat rose on Tuesday to confirm a gain for the month as dry weather threatened U.S. Harvest prospects and the latest developments in Iran war boosted gains on wider markets. The euro's sharp rise against the dollar has slowed down Tuesday's gains on 'Euronext'. The grain markets also took in the U.S. plantation estimates. The data surprised traders because it showed corn acres far above the average expectation of analysts, who were expecting a greater shift to soybeans due to rising fuel and fertilizer costs. Euronext's benchmark May milling wheat settled at 204.75 euro per metric ton, up 0.5%. The contract increased 1.6% in March, its third consecutive monthly gain. However, the increase was less than a 4.4% leap in February. Chicago wheat prices rose by more than 1%. Brent crude oil was on course to set a new monthly record, as news of an attack on a tanker in the Middle East heightened supply concerns. The broader market was buoyed by a report that U.S. President Donald Trump told his aides that he would be willing to end this war, even if the Strait of Hormuz remained largely closed. The price of grains has largely tracked the price of crude oil since the Iran War, a reflection of the use corn for biofuels as well as the rising costs associated with energy and fertilisers. The impact of the war in Iran on the wheat demand was also being assessed by traders. Tunisia won a tender to purchase 100,000 tons of soft grain at a price of $274.73 per tonne cost and freight. This was higher than the previous tender of $271.69. Jordan, on the other hand, completed its purchase of 60,000 tonnes of hard wheat at $275.95 per ton cost and freight (c&f), lower than $277.50 per ton paid in a tender held on March 17. The traders reported that for the April/May shipment,?Russian, Polish/Baltic and 12.5% Wheat was priced between $238 and $239 per ton (free on board) while German and Romanian wheat was priced between $240 and $243 per ton. U.S. hard-red winter wheat remains less competitive with a price of more than $279 per ton FOB. U.S. prices have increased as the drought has worsened conditions for crops. The European Union's soft wheat exports have risen 7% on an annual basis to 17.48 million metric tons so far this year, according to data released by the European Commission on Tuesday. Other traders were puzzled by a sudden jump in Danish barley imports to China.
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Suncor has a major shift planned to focus on in situ oil sands production by 2040
Suncor Energy, a Canadian oil sands giant, announced on Tuesday that the majority of their bitumen production?by?2040 would be produced by steam-assisted extract technology. This announcement marks a structural shift in the company's business model and will lead to lower costs and greater cash flow. Suncor produces 70% of its oil sands at large-scale operations in northern Alberta. Trucks and shovels extract the heavy, thick bitumen deposits, which are located?near the surface. The remaining 30% is from deeper deposits, which require steam technologies (also called in situ) to loosen the oil before it can be pumped up. Rich Kruger, Suncor CEO, said that over the next 15-years, Suncor will change its production mix so that by 2040, 60% will come from oil sands in situ development and only 40% will be from mining. Suncor's Base Plant, which will be mostly depleted in the mid-2030s is expected to decline, and the company wants a lower-cost product. Kruger stated that "all barrels aren't created equal." In situ mining produces two times more cash per barrel than today's mining. Suncor's Firebag site is already its most profitable asset. It produces 245,000 barrels of oil per day with in situ technology. Suncor filed a regulatory request on Monday to increase the permitted capacity of the site from the existing limit, which is 368,000 barrels per day, to 700,000. Suncor is expecting to be able, through debottlenecking projects and optimization, to increase Firebag's output to 275,000 barrels per day by 2028. Kruger also said that the company has proposed a?development in situ, called Lewis. It is expected to generate 160,000 bpd. The project will be built in phases, according to Kruger, to correspond with the gradual depletion of the Base Plant Mine. Suncor's Investor Day was eagerly anticipated by the market. They wanted to know how the company planned to replace the Base Plant production with a reliable bitumen supply. The company previously?proposed a 225,000 bpd open-pit expansion of its oil sands operations, located next to the existing Base Plant. It is unclear whether a similar?project would be approved by Canadian?regulators. Kruger stated on Tuesday that the company's newest estimate of reserves indicates it has 11 billion more barrels in reserves than originally estimated. This brings its total bitumen reserve to 30 billion. Suncor plans to increase its upstream production of about 100,000 barrels per day by 2028.
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Aluminium nears four-year high amid supply fears
Aluminum prices rose on Tuesday. They were near their four-year highs and poised to make the biggest monthly gain since?almost 2 years. This was due to fears that a supply shortage would continue after Iranian strikes over the weekend damaged some of the Gulf's key smelters. The benchmark 'three-month' aluminum on the London Metal Exchange increased 2.1% by 1600GMT to $3,471.50 per metric ton, after earlier reaching $3,536, which was its highest level since March 12. Metal prices are up 10.6% in March. The attacks on Iran damaged two aluminum plants in the Gulf region operated by Aluminium Bahrain, and Emirates Global Aluminium. These two companies account for 8% global supply. The companies have not provided an update on their operation. David Wilson, BNP Paribas' commodities strategist, said that the market was waiting for more information about what happened. We haven't received any official confirmation of the damage yet. If the market is able to break through the $3,546.50 peak reached on March 12, it could lead to record prices four years ago when markets were still dealing with the immediate effects of Russia's invasion in Ukraine. Goldman Sachs increased its second-quarter aluminum price forecast from $3,200 to $3,450 due to further supply disruptions. The global aluminium market is expected to have a deficit of 570,000 tonnes in 2026, compared to a surplus of 550,000 tons previously. Aluminium stocks registered with the LME The aluminium market has been tightening up in March. At 416,775 tonnes, it is at its lowest level since July. The premium for LME Cash Metal?over a?three-month Contract On Friday, the price of a ton reached $61, its highest level since 2007. This was a sign that there were concerns about immediate supply. The premium last stood at $54 on February. On the former Gulf?supply?side, Indonesian aluminium state company PT Inalum called on the government on Tuesday to impose a?moratorium?on alumina and aluminum?plants. Other LME metals include copper, which rose 0.9% to $12.329.50 per ton. Zinc gained 1.2%, lead dropped 0.2%, tin remained at $46,720, and nickel fell by 0.8% to $17.110. (Reporting and editing by Shailesh Kumar and Diti Pjara; Reporting by Polina Devitt)
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Six Palestinians killed in Gaza Strip by Israeli strikes, say medics
Israeli strikes?killed six people in a separate attack in 'the Gaza Strip on Tuesday, according to health?officials. This is the latest violence that has overshadowed a 'fragile five-month old U.S.-brokered truce deal. A medic said that an Israeli airstrike on Jabalia in the north of the enclave killed at least three earlier in the day. Another airstrike, which took place in Khan Younis in the south, killed a father, and his son. Health officials reported that an Israeli airstrike on Tuesday afternoon?against Palestinians near a checkpoint in Mawasi? in the southern Gaza Strip? killed one person and injured eight others. Israeli officials have not commented on any of these incidents. Hamas and Israel have exchanged blame over violations of the ceasefire agreement reached last October. Gaza's health ministry reported that Israeli fire killed at least 700 civilians since the ceasefire. Israel claimed that four soldiers in Gaza were killed over the same period by "militants". Israel and the U.S. are also involved in a 'conflict with Iran. Israeli forces have also invaded southern Lebanon as part of a new campaign to combat Iran-backed Hezbollah. According to Israeli figures, Hamas' attacks on Israel in October 2023 killed 1,200 people and 251 were taken as hostages. According to Gazan health authorities, Israel's two year-long offensive has resulted in the deaths of more than 72,000 Palestinians. Most of them were civilians. It has also spread famine, destroyed most buildings and forced most of Gaza's residents to move, often multiple times.
Oil sets a record monthly increase as global equities end a weaker month
The global equity and bond market jumped on the Tuesday due to speculation about a possible de-escalation of the Middle East conflict, which has led to the largest increase in oil prices ever recorded in a month.
Financial assets suffered despite the rally due to fears of stagnant growth and rising inflation. Oil prices have surged on the back 'the 'worst ever energy supply interruption. This has caused investors to flee both the stock and bond markets in March.
The benchmark STOXX 600 Index in Europe fell by 8% in the month of March. This was its biggest monthly drop in almost four years, and ended an eight-month streak of gains.
Unconfirmed reports suggest that Iran's president, who is less powerful than the supreme leader of the country, has said the country is ready to end its month-long conflict. Wall Street Journal reported that Trump told his aides earlier this year that he was willing to end military operations even if crucial Strait of Hormuz remained largely closed. Trump, however, has contradicted his own message on occasion, as he warned that the U.S. will "obliterate", Iran's oil and energy wells, if the strait is not opened. The strait is used to transport roughly one-fifth the world's oil and gas.
Colin Graham, the head of Robeco's multi-asset strategy, said that equity markets "take the U.S. government at its word" and believe it will end the war.
The Strait of Hormuz may still be closed on day two.
Brent crude futures for the front-month held above $110 per barrel following an attack and fire set by Iran on a fully loaded tanker near Dubai, early Tuesday morning. Brent crude futures rose nearly 5%, to $118.38 per barrel. This is on track to be the biggest monthly gain in history before the expiration of this contract.
Brent, the contract for the next month, fell 2.5%, to $104.65. U.S. crude dropped 63 cents, to $102.26 per barrel. On Monday, the average retail price for gasoline in the United States was $4 per gallon.
THE WAR'S GLOBALISATION The war that began with the U.S. and Israel striking Iran in late-February has sent shockwaves through global markets, and increased the risk of an international recession.
The MSCI index of global stocks rose by 16.72 points or 1.7% to 977.59. The index has fallen about 9% for the month.
Wall Street saw the Dow Jones Industrial Average rise 2.2% to 46203.56. The S&P 500 rose 2.5% to 6502.69, and the Nasdaq Composite increased 3.5% to 21513.34. The Dow Jones Industrial Average and S&P 500 were still on course for their largest monthly declines in almost four years. They both fell 5.3% and 7.7% respectively.
Alonso Munoz is the chief investment officer of Hamilton Capital Partners.
You get these periods when the market is so oversold, that you only have relief rallies if there are any good news.
The pan-European STOXX 600 Index rose by 0.41% and Europe's FTSEurofirst 300 Index gained by 0.40%.
U.S. jobs openings, which are a measure for labor demand, dropped more than expected in February, and hiring fell to its lowest level since nearly six years.
Fears of inflation and growth were heightened by the oil shock that pushed euro-zone?inflation? above the European Central Bank?s 2% target?in March. The government bond yields have fallen from their multi-year highs after the conflict. Investors are now focusing on the possibility of a weaker economy due to the energy shock.
After a month's heavy selling, U.S. Treasury price rose, sending yields lower. The de-escalation hope boosted demand for government bonds.
The yield on the German two-year bond fell by 4.8 basis points, to 2,574%. Before a Tuesday emergency meeting, the European Union's energy chief warned governments to be prepared for "prolonged disruptions" in energy markets due to war.
Graham, from Robeco, said that if the Strait of Hormuz remained closed for another week or two we would?raise our probabilities of a recession in our scenario analyses. However, this is not the case yet.
The U.S. Dollar fell but was still on course to gain a month-long gain.
The Japanese yen increased 0.57% to 158.82 dollars per yen. The Japanese finance minister stated that the government is ready to fight volatility in foreign exchange "on all fronts", underlining Tokyo's concern over the recent yen slide.
Spot gold increased by 2.25%, to $4.612.60 an ounce. However, it was still expected to end the month with a decline of over 10%. U.S. Gold futures closed 2.7% higher, at $4678.60. (Reporting and editing by Keith Weir and Chizu Nomiyama, with additional reporting by Purvi agarwal and Twesha dikshit)
(source: Reuters)