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Rating agency Fitch does not see any immediate impact from UAE's exit from OPEC
Fitch, a credit?rating company, said the United Arab Emirates'?decision to withdraw from OPEC 'would not have an immediate 'impact on its metric' but could increase oil revenues over the long term. Paul Gamble said that the OPEC withdrawal would not have any immediate impact on the country's?metrics, but could boost its oil revenues in the long term. Gamble, however, said that once the strait is fully reopened, the?UAE would likely increase oil exports as it will no longer be restricted by OPEC 'decisions. It would be helpful to diversify the economy and move away from oil, but it is likely that the UAE will still need to improve its AA stable credit rating. Fitch's rating is one notch below both S&P Global's and Moody’s respective ratings for the country. Gamble stated that "an increase in oil exports" would not have any impact on the rating, but "it would certainly help the sovereign balance sheet." He said that he saw the UAE's request for a currency swap line with the U.S., as "proactive", albeit "surprising" in terms of timing given the UAE's huge amount?of liquid assets. "Clearly, the UAE has liquidity needs right now." Swap lines are another way to access this?liquidity rather than selling a big pile of Treasuries or other government bonds. "But this is a precautionary measure and it's nothing to worry about." (Reporting and editing by Libby George, Keith Weir and Marc Jones)
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Oil forecasts rise as a result of the prospect of a prolonged Iran War disruption
A poll conducted on Thursday showed that analysts have raised their oil price predictions for the second consecutive time since the Iran War began at the beginning of February. They are now factoring in the possibility of a prolonged disruption of the energy market. Brent crude oil has reached its highest level?in?more than four years, at more than $120 per barrel. In April, a survey of economists and analysts conducted by 32 participants predicted that Brent crude will average $86.38 a barrel in 2026. U.S. crude is projected to average at $80.07 per barrel, up from the March estimate of $76.78. Analysts predicted Brent will average $82.85 per barrel in this year. This is a 30% rise from their February forecasts. Anushree Ganeriwala, Global Analyst, The Economist Intelligence Unit, said: "At the moment, the main driver of the markets is the current situation in Iran, as well as the closure of the Strait of Hormuz. The key variable will be when the Strait opens and the flows resume." Some analysts believe that the United Arab Emirates' decision to leave OPEC+ and OPEC, announced this week, will help moderate the price of oil in the long-term, once the Middle East conflict is over. The poll was conducted before the announcement by the UAE. Prices to remain high Brent oil has doubled in price over the past year due to the disruption of energy supply caused by the U.S. and Israeli attacks on Iran. Bridget Payne of Oxford Economics, who is the Head of Energy Forecasting, said that a sustained rise in oil futures prices above current levels as well as possible records are "definitely possible" if the Strait stays effectively closed for a few more months. Analysts have noted that even if the situation de-escalates, prices will likely remain high. Production and exports are expected to take several months to recover. Analysts at Kpler stated that "market tightness will persist, even if the peace negotiations are successful. Any rebound in Middle Eastern Exports would be gradual." Fatih Birol said that it will take two years to recover the lost energy production in the Middle East. Analysts estimate that non-OPEC production will grow modestly by 0.5 million bpd this year to 2.4million bpd. Slowdown in Demand and Supply Separately, a snap poll taken earlier in the month by predicted that the oil market would likely be impacted by the war's production cuts this year. This is contrary to previous predictions of an oversupply cushion. In an April 7 report, the U.S. Energy Information Administration halved their prediction. The EIA predicts that world oil demand will grow by approximately 600,000 barrels a day to?104.6 millions bpd. Analysts polled ranged between 200,000 to 950,000 bpd in their forecasts of demand growth for this year. Some predicted that the rise in crude prices will destroy some demand. The demand outlook is closely linked to the Iran War and the oil prices outlook. Payne stated that sectors susceptible to fuel shortages, or lower discretionary spending will likely drag down growth. This includes aviation and jet fuel.
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Ukrainian drones attack Russian oil installations 1,500 km away
Ukraine's Security Service (SBU) said that its drones struck an oil refinery near the Russian city of Perm on Thursday. This was the second attack in a row on oil facilities around the region as Kyiv tries to reduce the energy revenues Moscow uses to fund war. SBU: The Lukoil-owned refining plant, located over 1,500 km from Ukraine, is one of the largest refineries in Russia, with a capacity of 13 million metric tonnes per year. Lukoil did not respond immediately to a request for comment. The SBU reported that preliminary information indicated that the strike had hit a critical facility at the refinery for the primary oil processing, effectively taking the unit offline. The report added that the oil pumping station, which supplies oil to the refinery, was 'again attacked in the area. It said that the station was attacked over night?on Wednesday?and that Thursday's attack created new fire pockets. Ukraine intensified its attacks on Russia to disrupt the oil industry in Russia and reduce revenue that is used by Moscow to fund 'the war in Ukraine'. This was done as global prices rose amid the Iran War and sanctions were loosened against Moscow. (Reporting and editing by Alex Richardson, Louise Heavens and Anna Pruchnicka)
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MORNING BID AMERICA-Oil fears shroud tech splurge
What's important in the U.S. and international markets today by Mike Dolan, Editor at Large,?Finance and Markets The markets can't ignore the new surge in oil prices due to the Iran war. The global crude oil prices rose to their highest levels since the beginning of the war amid reports that Washington is considering a return to military action in order to break the impasse. The price of the June Brent futures contract hit a four-year high of $126 per barrel on the last day, and the new benchmark for July surged up to $115/bbl, before falling back. The Fed's Wednesday hawkish stance was largely influenced by the fuel price squeeze. Below, I'll go into more detail. Check out my most recent column about the signs that U.S. Inflation is on the rise. Listen to the Morning Bid podcast. Subscribe to the Morning Bid daily podcast and hear journalists discussing the latest news in finance and markets seven days a week. OIL FEAR SHROUDS THE TECH SPLURGE On Wednesday, the Fed kept rates the same. However, three regional presidents voted in favor of removing references to "easing bias" from its statement. Jerome Powell, the outgoing chair of the Fed, surprised many when he announced that he would stay on in a board position - at least temporarily - once his chairmanship ended next month. Powell's tenure on the board will last until the early part of 2028. This means that there won't be a vacancy in the board immediately for President Trump. Futures markets have eliminated all bets that the Fed will ease this year. There is a 1 in 3 chance of a rate increase by April next year. Treasury yields have risen again. The 30-year yield briefly topped 5% for the firs time since September. The dollar briefly jumped, but was knocked back below 160 yen due to Japanese intervention fears. Today, the European Central Bank (ECB) and Bank of England (BoE) will announce their rates. Both are expected to hold policy, but also warn of inflationary pressures related to oil. Meanwhile, after the Wednesday bell, mega-cap earnings swept in. Alphabet's share price soared by more than 6 percent on the back of its impressive cloud business and its beating. Meta, however, fell more than 6 percent as investors worried about its recent capex boost. Share price reactions were subdued to Microsoft and Amazon's results, but there was no major red or green flag in the massive AI buildout. The spending by the "hyperscalers" this year will likely top $700 billion. The bill may be justified, or it may not. But the demand for AI equipment and chips will continue to rise for the time being while the final outcome of the massive capex is still being assessed. Finaly, Asian shares dropped?on Thursday's renewed oil surge, while European stocks opened lower and Wall Street Futures were mixed. Chart of the Day South Korean tech giant Samsung Electronics announced record quarterly profits driven by a?jump of 49-fold in chip income. It said it expects supply shortages to worsen next year, as clients invest more on AI. The results come just a day after U.S. megacaps Microsoft Alphabet Amazon and Meta revealed that their 2026 capex plans have now topped $700 billion. Watch today's events * U.S. PCE inflation data for March (8:30 am EDT), and weekly jobless claims (8:30 am EDT). Apple's earnings in the U.S. Bank of England rate decision (7:15 am EDT) & European Central Bank rate announcement (8:15 am EST). EDT) Want to receive Morning Bid every morning in your email? Subscribe to the newsletter by clicking here. Follow us on LinkedIn, X and ROI. The opinions expressed here are the author's. These opinions do not represent the views of News. News is committed to the Trust Principles and a commitment to independence, integrity and neutrality.
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Investors assess Iran tensions as gold climbs from a one-month low; dollar eases.
Gold prices jumped Thursday as oil prices slid and the 'dollar' eased. Some analysts also cited an increase in demand for safe-haven assets due to growing fears that the U.S. - Iran war could escalate. As of 1017 GMT spot gold rose 1.9%, to $4,630.03 an ounce. It had fallen to its lowest level since March 31, in the previous session. Bullion has fallen by about 0.9% this month. U.S. Gold Futures for June delivery increased 1.8% to $4642.90. Dollars fell by 0.3% making greenback bullion cheaper for holders of other currencies. Gold is recovering because of the uncertainty that exists in the Middle East. According to independent analyst Ross Norman, the strength of the current recovery also suggests that the price has found a temporary floor. According to Axios, U.S. president Donald Trump will?receive an briefing on Thursday regarding?plans to launch a series military strikes against Iran. Brent prices reached four-year highs due to fears of an escalation before turning negative. Since the beginning of the conflict, gold has fallen by about 12%. Gold is considered a safe haven in times of uncertainty. However, the rising price of energy has sparked fears of inflation and higher interest rates. This would put pressure on the non-yielding material. However, some analysts say that the demand for safe havens could be increasing. "Gold is behaving more as we would expect." It should rise in times of geopolitical uncertainty, and that risk is the speculation that the U.S. may be preparing for the next level of escalation, said Nitesh Sha, commodity strategist at WisdomTree. The U.S. Federal Reserve Chairman Jerome Powell ended eight years of leadership on Wednesday by holding interest rates. The markets are waiting for the Personal Consumption Expenditures data for March at 1230 GMT to get more clues on U.S. monetary policies. Silver spot rose 3%, to $73.60 an ounce. Platinum gained 3.3%, to $1,941.45, while palladium was 1.3% higher at $1,476. All three metals are on course for a second consecutive monthly decline. (Reporting from Pablo Sinha, Bengaluru. Editing by Shailesh Kuber)
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Bombardier's quarterly revenues rise 5% due to strong demand for maintenance services
Bombardier, a Canadian business jet manufacturer, reported on Thursday a 5% increase in revenue for the first quarter. This was aided by a robust demand for maintenance and repair services as well as a new plane delivery compared to a year ago. The demand for parts and services to maintain its growing global jet fleet was strong, particularly in the U.S. This led to a 25% increase on the previous year. The Middle East conflict has caused jet fuel prices to rise, but private aviation is still largely resilient. CEO Eric Martel stated in a statement that the plane maker generated $360 in free cash flow during the first quarter. This was its highest level for a quarter in nearly two decades. The $360 million in free cash flow was a significant increase from the $304 millions used during the previous quarter. Bombardier has raised its outlook for free cash flow in 2026 to more than 1 billion dollars, up from an earlier range of $600 to $1 billion. The company reiterated its plans to deliver more than 157 aircraft this year. Bombardier has received new orders for the Global 8000 'ultra-long range business jet', which was recently certified. This is due to the sustained demand -for private -flying. The Montreal-based firm delivered 24 aircraft during the quarter, which is one more than it did in the same period last year. The company reported a quarterly revenue of $1.6 Billion, up from $1.52 Billion a year ago. On a recalculated basis, Bombardier earned $1.81 per share during the first quarter of this year, compared to 61 cents.
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In March, China approved large-scale exports of rare Earth essential for US aerospace.
China has exported large quantities of a rare earth used in chip-making and aerospace to the United States. Customs data showed that in March, tight controls, which caused shortages and record-high prices, could be loosening. The 60-ton shipment is 50 percent larger than the total yttrium shipped to the U.S. from China since April, when China implemented export controls on several rare earths at the height of the trade war. While rare earth exports were mostly resumed following a 'trade truce' late last year, the yttrium shipment was largely stuck. This caused shortages and production stops for aerospace and semiconductor companies. Prices rose by 6,900% over the past 12 months, and several companies affected lobbied Washington for a resolution. To protect turbines and jet engines from high temperatures, yttrium oxide can be used to make coatings. Analysts say that the close relationship between aerospace and defense may have been a factor in Beijing's hesitation to allow exports. Even after the?March?shipment, the yttrium oxychloride exports to the U.S. in the last 12?months have dropped 75% from the previous year. In March, there were no other shipments of yttrium metals or compounds.
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TotalEnergies, Nextnorth to build $300 million Philippine Solar Farm
By America Hernandez PARIS, 30 April - French oil major TotalEnergies, and Philippine renewables developer Nextnorth, have announced that they have started construction on a 440 Megawatt-peak Solar Park in the Asian nation. The $300 million project is scheduled to be 'online' by the end of 2027 and will produce 1.2 Terawatt-hours over a period of?20 Years. The remaining half will go to the national grid in the fourth renewable tender round. Total, unlike other oil companies that have walked back on their renewable commitments has expanded its green portfolio. Most recently, it formed a joint venture, with Emirati company Masdar, to develop wind, sun and batteries in Asian nations which are heavily reliant on natural gas imported. Energy security is more important than ever for the Philippines. Nextnorth CEO Miguel Mapa said that the country needed a large, affordable, domestic renewable energy capacity to meet a growing demand and a heavy dependence on imported fuels. Sumitomo Mitsui Banking Corporation and ING Bank NV are among the financial institutions that offer loans. TotalEnergies is putting 65% of its stake in the project into a renewable joint venture it has with Masdar. Nextnorth will hold 35%. (Reporting by America Hernandez in Paris. Mark Potter (Editing)
IMF urges Asia to maintain policy balance amid Middle East Energy Disruptions
Krishna Srinivasan, IMF director for Asia Pacific, said that Asian countries need to prepare for future shocks while they deal with the energy crisis brought on by 'the Iran War'.
Southeast Asian economies budgeted large sums of money to offset the price hikes and introduced energy-saving measures, such as work from home plans.
Srinivasan warned against a massive increase in energy subsidies at a roundtable of media.
He said that it is difficult to reverse generalised subsidies. Instead, countries should provide budget neutral fiscal support and maintain fiscal discipline.
He said, "In other words, cut somewhere else to support those who are being affected by the energy crisis."
Srinivasan stated that while certain markets, like Thailand and China, could hold off tightening their monetary policies because they were in deflationary terrain, those already exceeding their inflation target, such as Australia, needed to begin now.
He noted that some markets, like the Philippines, had tightened preemptively in order to anchor inflation expectations. However, he said that the IMF would have advised to wait and see if the inflation actually picked up.
He said: "You can choose to buy insurance up front or wait to see if you want to hurt the growth. It's a difficult balance for a central banker to achieve."
IMF reduced its global GDP forecast for 2026 on 'April 14 to 3.1%, assuming that the Middle East conflict would be short-lived and that oil prices would normalize in the second half of the year.
IMF Chief Economist Pierre-Olivier Gourinchas has warned that a "disadvantageous scenario" of 2.5% is becoming more likely due to the continued disruptions in energy and the lack of a clear way out of the conflict.
Srinivasan stated that the IMF's most severe growth scenarios would become more likely if the Strait of Hormuz remained closed for longer than the next three month and oil prices stayed high throughout the rest the year.
He said that there are still downside risks to growth. The world economy is facing a number uncertainties, such as the length of the energy crises and the severity in which fertiliser shortages could occur. This could lead to a shock in the food supply.
(source: Reuters)