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The US has a large supply of cargoes to cushion it from the price shock in Europe and Asia
Analysts and traders say that U.S. crude cargo prices have fallen from recent price spikes, while in Europe and Asia prices continue to reach record highs, seven weeks after the Iran 'war. The war in Iran disrupted the global oil flow with the closure of the Strait of Hormuz - a vital trade route - and caused damage to oil facilities in the entire region. This pushed the price of crude oil in Europe, the Middle East and Asia up to record highs. As the world's largest oil producer, the U.S. has been able, through its refineries, to access the medium-sour crude that they prefer, as well as recent product from Venezuela to cushion some of the shock. According to Argus Media data, physical cargoes of Mars Crude, a medium sour crude produced in the U.S. Gulf of Mexico traded at an outright rate of $97 a bar on Wednesday. This is down from $128.70 a bar on April 2. The price of Dubai benchmark crude oil in the Middle East became the most expensive benchmark at $170 per barrel. "European buyers and Asian buyers require immediate physical barrels. U.S. refiners are "on the supply-side of the equation" and not "price-takers", according to David Jorbenaze. As part of an international effort to address shortages caused by the war, the U.S. is releasing 172 million barrels from its Strategic Petroleum Reserve. Gus Vasquez is Argus Media's crude editor. He said that the SPR release will feed into markets in which Mars will directly compete. "So an increase in supply of its product is likely to have a negative impact on prices, as we have historically seen when there has been an SPR released." VENEZUELAN CRUDE Imports Rise The crude oil released by the SPR has a medium-sour taste, just like the Venezuelan crude that more U.S. refining companies have access to since the capture of Nicolas Maduro, the former Venezuelan president, in January. In the first quarter of 2019, the U.S. imported 295,000 barrels of Venezuelan crude per day, an increase of 14% over the previous year and the highest quarterly amount since the fourth quarter 2018. The combination of SPR releases, Venezuelan barrels and high freight risks for?Europeans or Asians are keeping a lid the U.S. Physical Market," said Neil Crosby. Analyst at Sparta Commodities. He added that, from a sour perspective, the region is well supplied. However, not all U.S. crude oil prices have dropped. WTI Midland, a lighter, lower-sulfur oil, delivered to Europe by refiners'scrambling' for alternatives to Middle Eastern imports, reached a record high on Tuesday of $22.80 per barrel over Brent. Janiv Shah, Rystad Energy vice president for oil markets analysis and Rystad Energy, stated that Mars is rarely exported because it's consumed in the United States. The export-oriented WTI, however, would have the most upside due to the increased competition. Reporting by Robert Harvey, London; editing by Liz Hampton and Bill Berkrot.
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The US Energy Secretary is criticized by lawmakers for forcing coal-fired plants to continue operating
U.S. legislators criticized Energy secretary Chris Wright for ordering that aging coal plant remain open in hearings held on Wednesday and Thursday, saying: 'the action will raise the already high power bills for steelmakers and consumers. Wright's department ordered in December that two Indiana coal plants, which had planned to?close permanently?, remain open. They said this would reduce the risk of power outages and provide affordable electricity. CenterPoint Energy's and Northern Indiana Public Service Company's coal plants were to be replaced with natural gas or other sources of power. NIPSCO estimates that it will cost them $100 million to maintain their plant. Representative Frank Mrvan of Indiana said that keeping the plants open could lead to higher power rates, as the Federal Energy Regulatory Commission has authorized the regional grid operators to recover costs for compliance. Mrvan said to Wright on Wednesday that Northwest Indiana was the largest steel-producing region in the United States. Utility rates affect the price of steel and therefore the price of all the products we produce. Please explain how the forced emergency order benefits those who are being crushed by these policies. Wright stated that the ultimate goal was to drive down prices and protect the grid against blackouts, in a region populated by data centers which are power hungry. Wright has agreed to review his orders for the plants to remain open in Indiana and Washington State. CenterPoint sent Wright a letter on February 17 asking him to withdraw the order to keep its?F.B. Culley 2, stating that it would be costly to maintain the "inefficient, and increasingly unreliable" asset. Citizens Action Coalition, a public interest group, obtained the letter published on Thursday. Wright's department instead issued another order to CenterPoint in March, directing them to "run the plant" until at least June 21, Ben Inskeep said that the orders were an "outrageous misuse of power" and would cause the energy bills of Americans to continue to rise. Wright also ordered TransAlta 'to keep a coal-fired unit open in its Centralia facility, Washington State that was planning to retire by the end of 2025. Kim Schrier said that consumers are paying for the cost of keeping this unit in standby, even though it's not producing power. Hydropower and natural gases are replacing it. She said the order was a result of the administration's "obsession" with coal. (Reporting and editing by Nick Zieminski; Additional reporting by Valerie Volcovici, with additional reporting by Timothy Gardner)
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California gasoline stock drops to record lows due to disruptions caused by Hormuz
Fuel prices are soaring across the country due to 'the war against Iran.' Analysts warn that California has not yet felt the full impact of supply disruptions caused by the closing of the Strait of Hormuz. According to the American Automobile Association, California motorists paid an average of $5.86 per gallon on Thursday, the highest price in the U.S. This is far higher than the national average of $4.09 per gallon. Analysts say that because California relies heavily on Asian refined products, the supply crunch will worsen. This means California is among the first states in the U.S. who are likely to feel the effects of the Strait of Hormuz closure, which affects a fifth of world oil and gas. The Energy Commission's Niki Woodard, spokesperson for the agency, said that the commission is in constant communication with the state refineries to ensure an adequate supply of transportation fuels during this volatile time of reduced supply due to the closure of the Strait of Hormuz. The average state gasoline stock for the four-week period ended April 10 was 9.44 million barrels, the lowest since 2005. These inventories consist of California blend gasoline, blending ingredients and non-California gas. Because it is not connected to the country's fuel pipelines it is more vulnerable to price shocks. This forces it to import from Asia where refiners refine Middle Eastern crude oil into gasoline and other products that are used on the U.S. West Coast. According to AAA, the $5.86 average statewide represents a 26 percent increase since the start of the Iran War. California's gas prices are higher due to taxes and extra costs to produce the unique gasoline blend developed to reduce the smog which was once a common sight over Los Angeles. DECLINE IN Inventory Michael Mische, a professor at the University of Southern California wrote this week in an analysis that the full impact of decreasing gasoline and crude imports have not yet been seen in California's fuel systems. It takes about a month to ship refined products from Asia to California. The analysis predicts that gasoline imports will drop sharply in the next two to three weeks. The analysis said that this will be the moment when the impact of the import shock is fully felt in the terminal supply, and ultimately at the pump. Susan Bell, of Rystad energy, said that California's gasoline inventories may worsen over the next few weeks. California was once a major oil producer. However, in recent years the state has become more reliant on fuel and crude imports due to two refineries that accounted for 20% of California’s refining capability closing. According to the CEC, its crude oil inventory was 10.09 million barrels, a decrease of more than 23% compared to a year ago. Woodard, a California refinery official, said that the refineries are using alternative sources of crude oil and gasoline to compensate for the loss in Middle East cargoes. "We do not predict a supply problem in the near future." The agency has enough stock to last until mid-May. Californians consume about 36 million gallons per day.
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Valero Port Arthur refinery partially restarts after blast, according to sources
Two people familiar with the plant's operations said that Valero Energy Corp. has partially restarted their 380,000 barrels per day Port Arthur, Texas refinery after an explosion and fire on March 23. Valero repairs the heater on the 210,000 bpd crude distillation unit (CDU) while the production line of the 115,000 bpd CDU is running. This production line is closed. A Valero spokesperson failed to respond to a question for comment. During an inspection of the units of the refinery following the 23 March shutdown of the unit due to the fire, Valero found a damaged tube within the AVU-146?heater. Valero intends to restart the CDU once the heater tube is repaired. AVU 146 is a crude distillation unit that accounts for 2% or 9.62 million bpd of the crude oil refinery capacity of the U.S. Gulf Coast States of Texas, Mississippi, and Louisiana. This represents over half of 'the U.S. overall. AVU 146 is capable of 3.4% of Texas' total atmospheric crude distillation capability of 6.13 millions bpd. CDUs work at atmospheric pressure, converting crude oil to?feedstocks? for other refinery units. The March '23 explosion and fire at the diesel hydrotreater did not result in any injuries, but a?person filed a suit, claiming he was injured after being knocked down. Valero had previously refused to comment on the lawsuit. Due to the shutdown of the refinery, the price of diesel rose by 16 cents per barrel the day after the explosion. (Reporting and editing by Nathan Crooks, Nick Zieminski, and Erwin Seba)
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US sanctions Nicaraguan officials involved in gold sector
The U.S. Treasury Department imposed sanctions Thursday on a number of individuals and companies operating?in Nicaragua’s gold sector. This included two sons?of?the co-presidents?of the country. The Treasury Department announced in a press release that Santiago Hernan Bermudez Tapia is also sanctioned. He is Nicaragua's vice-minister of energy and mining. The Treasury Department also announced sanctions against a number of companies that they said were complicit in helping Nicaragua's government to generate money through gold and maintain its political control. Treasury Secretary Scott Bessent stated that the Nicaraguan Government, led by?Rosario Murillo, her husband Daniel Ortega and their family, sought to "confiscate American investments" by the country. He said: "The United States will not permit the illegal confiscation of American assets, and will continue to target the revenue streams that empower Murillo-Ortega's corrupt regime." Washington has used economic and diplomatic pressure on Managua to reform since April 2018, when a violent crackdown began following mass protests. Last year, the?United Nations accused dozens of officials in Ortega's Government of grave human rights violations and crimes. It described this as "a tightly coordinated system of repression", following protests. Treasury said that the sanctions imposed Thursday were a result of the occupation of 2025 and the forced seizure by BHMB Mine Nicaragua S.A. in Nicaragua, a Nicaraguan firm founded in 2019 using foreign investment from a U.S.-based company. The report said that high-ranking officials of the Murillo Ortega government had benefited from Nicaragua’s increased gold exports over the past few years, as well as state-owned Empresa Nicaraguense de Minas' actions to funnel profits to “private sector partners” and to give "kickbacks" to "regime?insiders." Treasury's Office of Foreign Assets Control has sanctioned two of the ruling family's sons: Maurice Facundo Ortega Murillo who is the Nicaraguan president's delegate for sport and Daniel Edmundo Ortega Murillo who leads the Communication and Citizenship Council of Nicaragua. Santa Rita Mining Co. was given land concessions to extract minerals. Exportadora de Metales Sociedad Anonima in Nicaragua sells gold 'to the U.S. Treasury also announced that Grupo Minero Xiloa S.A. was sanctioned. Treasury accused the company of using U.S. financial systems to legitimize illegal funds, and then using the proceeds to fund the political machinery of the government. The companies and individuals listed did not immediately respond to requests for comment.
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Kobe defeats Al-Sadd to advance to the Asian Champions League semifinals
After a thrilling 3-3 draw,?Vissel KOBE advanced to the Asian Champions League Elite semi-finals on Thursday?as they eliminated Roberto Mancini's Al Sadd on penalties?by a score of 5-4. Claudinho missed the third round penalty kicks, leaving substitute Jean Patric with the opportunity to score the winning spot-kick for the J-League team. The club advanced to the final four for the first time in its history. Michael Skibbe said that Japanese teams never give up. His team, Kobe, equalised in stoppage time through Yoshinori Muto to send the match into extra time. We tried to score until the very last second, and we did it even at the last moment. Al Sadd took the lead at the end of the sixth minute after a flowing counterattack that was sparked off by a clever backheel by Roberto Firmino towards Claudinho inside his own half. The Brazilian quickly moved the ball to Akram Afif, and his incisive?pass found Rafa mujica at the?edges of the penalty box. From?there the Spaniard?scored a clinical?first-time finish over Daiya maekawa. The Japanese team took 18 minutes to reply. Former Japan international Yuya Okasako found himself unmarked at 12 yards from the goal when he received Gotoku Sakai’s cross on the right. He powered a header past Meshaal Barrsham. Osako nearly added a second goal when he headed the ball against the crossbar ten minutes before the end of an entertaining first-half. Al Sadd won the game with two goals in just four minutes of the second half. Mujica scored his team's second goal in the 61st, after Firmino redirected Claudinho’s pass to the penalty area with his chest. Mujica, the former Las Palmas striker, then provided the third Al Sadd goal. He grabbed Afif's deep pass and set up Firmino when he was unmarked in the Kobe penalty zone. Yusuke?ideguchi gave Kobe a chance with?16 mins remaining, when he shot from 10 yards into the bottom right corner. Muto then?head in Rikuto?Hirose's?cross with the final touch of regulation time to send the game into extra-time. Maekawa's three saves kept Kobe in the match in extra time, and moved the game to a shootout. Vissel's penalty takers were perfect in the shootout. They set up a meeting in the last four with either Al Ahli champions or Malaysia's Johor Darul Ta'zim. (Reporting and editing by Christian Radnedge, Michael Church)
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Eurogroup chief: EU must have energy union in order to compete with US, China
The European Union must have a European energy union before it can implement other reforms to remain competitive with the United States. Kyriakos pierrakakis, chairman of the eurozone's finance ministers group, said on Thursday that the European Union must create an energy union in order to remain competitive against the United States. Pierrakakis, speaking at the International Monetary Fund (IMF) in Washington said that the EU needed to create a true energy union to allow energy to easily flow across borders and lower electricity prices on the 450 million-person single market. European energy prices are between two and three times more expensive than those in the U.S., or China. This puts the EU 27 at a competitive disadvantage compared to other global competitors. "Advancing the energy union in Europe ... will have a direct ... positive impact, both energy-wise, ?but I would say competitiveness-wise. "We need this... to be in a position to implement the entire vision of the Letta and Draghi reports," Pierrakakis said at a seminar held during the International Monetary Fund spring meetings. Mario Draghi, former Italian prime minister, and Enrico Letta, former Italian prime ministers, prepared reports in 2024 on how to improve the EU's single market and boost Europe's competitiveness. They recommended dozens of reforms. There are several initiatives, including efforts to consolidate 27 national capital markets of the EU into one. A special legal regime would also be introduced for pan-European firms that would apply across the entire bloc. And a digital Euro would be launched as a European controlled means of online payment. Pierrakakis stated that without a "full-scale" energy union we would not be able create the conditions necessary to implement these elements of the policy. Since 2015, the EU has been working on a project to coordinate energy policies and create an integrated, single market for gas and power. This allows electricity to be sold and moved easily from one region to another. The plan will require large investments in modernizing and connecting the national European electricity grids, joint purchasing and storage as well as overcoming political obstacles and vested interests from national energy sectors. This plan is all the more important after the energy crisis of 2022, caused by the Russian invasion of Ukraine, and more recently by the closing of the Strait of Hormuz - the gateway to a fifth of world oil and gas - as a result of U.S. and Israeli war against Iran. (Reporting and editing by Paul Simao; Jan Strupczewski)
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Oil prices rise as doubts over a U.S. peace agreement with Iran lift stocks.
Oil prices rose on Thursday due to concerns about a possible deal to ease the grip of Middle Eastern energy supply. U.S. president Donald Trump announced on Thursday that Israel and Lebanon had agreed to a 10-day truce and that the next meeting between Iran and the United States could take place this weekend. Israel is waging an parallel campaign in Lebanon against the militant group Hezbollah, which is backed by Iran. In a Thursday post on Truth Social, U.S. president Donald Trump stated that Israeli and Lebanese officials had agreed to?start a 10-day truce at 5 pm EST (2200 GMT). Wall Street saw U.S. stock prices rise, with S&P 500 and Nasdaq Composite achieving intraday records. The S&P 500 Energy index was the best-performing of the 11 major S&P sector indices. The Dow Jones Industrial Average increased 80.75 points or 0.16% to?48.542.75, while the S&P 500 rose 869 points or 0.12% to 7,031.57, and the Nasdaq Composite advanced 41.33 points or 0.17% to 24,057.35. The war remains the most significant?driver for the market. Robert Phipps is a director of Per Stirling Capital Management, in Austin, Texas. The rubber band was stretched very far to the bottom. The rubber band has snapped and is not longer stretched downward. The market should now trade on its own fundamentals. PepsiCo, the U.S. beverage giant, gained 1.5% as earnings season began to pick up. They beat their quarterly profit expectations. After reporting their results, Travelers, Charles Schwab Financial and Abbott Laboratories all dropped. MSCI's global stock index rose by 2.36 points or 0.22% to 1,063.29, while the pan-European STOXX 600 closed down by 0.05%. OIL MARKETS SKEPTIC Oil prices rose after falling earlier on the hope of a solution to the Middle East conflict. U.S. crude oil settled up by 3.72% at $94.69 per barrel and Brent settled for $99.39 per barrel, an increase of 4.7% in one day. After data showed that initial weekly jobless claims last week were lower than expected, the U.S. Dollar rose and retraced some of its recent declines. The index, which measures greenbacks against a basket including the yen, euro and yen, rose by?0.22% at 98.22. The index fell for eight consecutive sessions until Wednesday, losing most of its gains as the war increased the appeal of the greenback as a "safe haven". Investors were weighing whether any ease in tensions between?U.S. The Federal Reserve is expected to cut rates if tensions between the U.S. The spot price of gold rose 0.01%, to $4,790.57 per ounce, while U.S. futures gold prices advanced by 0.08%, to $4,803.70.
Oil rallies and stock market record highs follow the ceasefire between Israel and Lebanon
The global stock market rose to a new record high on Thursday, as the announcement of the ceasefire between Israel & Lebanon lifted sentiment. However, oil prices also increased as the global supply buffers continue dwindling with the Strait of Hormuz still being blocked. Donald Trump, the U.S. president, announced that Israel and Lebanon had agreed to a 10-day truce. He also said the next U.S.-Iran meeting could take place this weekend. Two Iranian sources said that the negotiations have scaled down their goals for the talks because the U.S. Navy has also stopped Iranian vessels from crossing the Strait. Israel is waging an parallel campaign in Lebanon against the Iran-backed militant Hezbollah. In a Thursday post on Truth Social, Trump said that Israeli leaders and Lebanese officials had agreed to a 10-day truce.
The S&P 500 and Nasdaq Composite closed at record levels for the second session in a row, led by an increase of 1.6% in the S&P 500 Energy index. The Nasdaq is now up for a record?12 consecutive sessions, which is its longest winning streak ever since July 2009. MSCI's global stock index rose 0.3% or 3.26 points to 1,064.19, after reaching an intraday high of 1,065.59. The?pan-European STOXX 600 Index edged down by 0.05%.
Is a PULLBACK in the Offing?
Some investors believe that the market is due for a?retrenchment'.
The war is still a major driver for the market. It would be unusual for us not to stall and go back to retest, even though we broke through to new highs yesterday, said Robert Phipps. He is a director of Per Stirling Capital Management, in Austin, Texas.
The rubber band was stretched very far to the bottom. The rubber band has now snapped back, and it is no longer twisted to the bottom.
Crude futures prices have been fluctuating wildly in recent days. This is often due to Trump's latest optimistic pronouncements about an imminent end to conflict, which would result in the Strait of Hormuz being reopened to allow for the movement of one-fifth of world oil and gas supplies.
Oil prices rose on Thursday. U.S. crude settled up 3.7% at $94.69 per barrel while Brent settled up 4.7% at $99.39.
The Dow Jones Industrial Average grew 115 points or 0.2% to 48,578.72. The S&P 500 rose 18.33 points or 0.3% to 7,041.28. And the Nasdaq Composite increased 86.69 or 0.4% to 24,102.70. U.S. beverage giant PepsiCo grew 2.3% as it exceeded quarterly profit expectations. Abbott Laboratories in the healthcare industry, Charles?Schwab brokerage and Travelers insurer all suffered losses after releasing results. After the U.S. weekly initial jobless claims came in lower than expected, the U.S. Dollar rose and retraced some of its recent loss. The index that measures the greenback versus a basket including the yen, the euro and other currencies rose by 0.22%.
The index had fallen for eight consecutive sessions?throughout Wednesday. It had lost most of its gains?as war increased the appeal of the country as a haven.
Gold prices were not much changed. Gold prices were little changed. Spot gold rose by 0.02%, to $4.790.79 per ounce, while U.S. futures rose by 0.08%, to $4.803.70 per ounce.
(source: Reuters)