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Brent oil stocks are in limbo as they head for a record-breaking month
Brent crude oil rose by 3% Monday, and was on track for a monthly record rise. Global stocks were in limbo while investors waited for the Gulf conflict that they fear could 'bring inflation to a climax and increase the risk of recession in many parts of the world. In a region that is more dependent on Gulf oil, the?Nikkei?index closed down 2.8% in Asia. European stock markets firmed up in early trading, and Wall Street futures indicated gains - albeit small given the recent sell-off. Investors were assessing conflicting developments. According to The Financial Times, Donald Trump said that the U.S. might seize Kharg Island, where Iran exports most of its oil from the Persian Gulf. However, he also suggested that a ceasefire may come soon. Pakistan has said that it is preparing "meaningful discussions" in order to resolve the conflict with Iran within the next few days. This comes despite the fact that Tehran accuses Washington of planning a land attack as the U.S. army builds up its forces in the area. Eren Osman is managing director of wealth at Arbuthnot Latham. He said that reopening the Strait of Hormuz would be the key to calm the world markets. He said he didn't expect a long-term conflict because he thought Trump had a pain threshold for the market. Madison Cartwright is a senior geo-economics expert at Commonwealth Bank of Australia. She said that Iran's control of Strait of Hormuz gave it little incentive for concession. The bank expected the war to last until at least June. Prices for fuel, oil, gas and fertiliser have risen as a result of the clampdown in the Strait. Food, pharmaceuticals and other petrochemicals are all expected to increase in price. This is especially bad news for Asia as much of this region depends on Middle Eastern energy. The broadest MSCI index of Asia-Pacific stocks outside Japan fell 1.8%. European stocks last gained 0.3%. S&P 500 and Nasdaq Futures both showed gains of 0.5% each. Bruce Kasman warned that the longer the Strait is closed, the more the buffer supply will be reduced, which could lead to dramatic price increases for crude oil, gas, and other commodities. If the Strait remained closed for another month, oil prices would rise to $150/bbl. This scenario would also be consistent with a possible increase in industrial energy consumers' costs. Brent crude is up 3% at $116 per barrel. This would be a gain of 60% in March, which would surpass the jump in price that occurred in 1990 after Iraq invaded Kuwait. U.S. Crude climbed 2% at $101.67. Investors have revised their outlook for interest rate rates in almost all countries due to the inflationary threat. The U.S. Federal Reserve chair Jerome Powell is scheduled to speak at an event on Monday. John Williams, the influential head of New York Fed will also be speaking. This week, data on U.S. manufacturing, retail sales and payrolls will give an update on the state of the economy. Bond markets have been hit by the energy shock and pressure on fiscal budgets due to higher borrowing costs. The yields on ten-year U.S. Treasury bonds were at their lowest point of?4.3959%. The increased volatility of the markets has helped the U.S. Dollar as the most liquid currency in the world. The U.S. also has a comparative advantage over Europe and Asia because it is a net exporter of energy. The dollar index traded?nearly a 10-month-high at 100.26 and was essentially flat for the day. The?dollar fell 0.3% to 159.775yen after more warnings from Japanese authorities about possible intervention. The?dollar has dropped 0.3% to 159.775 yen after more warnings from the Japanese authorities. The euro dropped 0.1% to $1.1493, which is not far off the March low of $1.1409. Gold gained 0.9% on commodity markets to $4,534 per ounce, after recently receiving little support as a haven for safe-havens or as a hedge from inflation risks. Reporting by Iain Withers, Wayne Cole and Thomas Derpinghaus; Editing by Muralikumar Aantharaman and Susan Fenton
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The gold price is capped by dimmed Fed rate cuts and dip buying;
Gold rose on Monday due to a surge in energy prices, which fueled inflation fears and dimmed expectations of interest rate reductions by the U.S. Federal Reserve this year. As of 0755 GMT spot gold was up 0.8% at $4,526.67 an ounce, bouncing back from a loss of 1% earlier in the day. U.S. Gold Futures for April Delivery gained 0.7%, reaching $4,554. Gold's price action last week, when it ended a three-week losing run, suggested that oversold behavior was at play and that recent declines could be reversed. This must be confirmed this week by the price action. Nicholas Frappell is the global head of institutional market at ABC Refinery. He said that given the rapid pace of headlines, it was easy to anticipate volatility. Brent crude rose above $115 per barrel after Yemeni Houthis attacked Israel over the weekend. This widened the ongoing war and added to inflation problems. The contract has risen 60% in March so far, which is a record monthly increase. The traders see little likelihood of a rate cut in the United States this year as higher energy costs threaten to increase inflation and limit monetary easing. This compares to expectations of two rate cuts before the conflict started. Gold's appeal is boosted by inflation, but high interest rates reduce its demand. The markets are now awaiting Federal Reserve Chair Jerome Powell’s remarks later that day at a Harvard conference, as well as remarks from New York Fed President John Williams. The U.S. Dollar, which has gained a little more than 2% since February 28, when the U.S. and Israeli war against Iran began, has been a major factor in the gold price's decline. Bullion has risen about 5% this quarter. The biggest macro-picture behind this underperformance is a huge shift in interest rate expectations... Frappell said that the USD has reacted to this. Spot silver increased 1.2%, to $70.43 an ounce. Palladium and platinum spot prices rose by 3.4% and 2.8% respectively. (Reporting and editing by Sumana Nandy, Harikrishnan Nair, and Noel John from Bengaluru)
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Floods and heavy rain kill 22 Afghans
The National Disaster Management Authority in 'Afghanistan (NDMA)' announced on Monday that heavy rains triggered flash floods and collapsed buildings, killing 22 people. It also injured 32 others. The majority of deaths occurred in the eastern and central provinces, such as Parwan, Maidan Wardak and Daykundi, where torrential rainfall caused flash floods, and collapsed houses. It said that conditions remained "unstable", with the risk of flooding and further rain in certain areas. Twenty-two people have been killed and 32 injured in floods and other weather related incidents that occurred across 13 provinces during the last two days, according to an NDMA representative who declined to be identified because he wasn't authorised to address the media. Afghanistan is susceptible to 'natural disasters, and the United Nations has listed it as one of?the most vulnerable countries to climate change. Since the Taliban took power in 2021, international aid has been cut, and the country is struggling to cope. In a report published by the United Nations Development Programme in November, it was stated that earthquakes, flooding, and drought had destroyed 8,000 Afghan homes in 2025, and stretched public services to their limit. Reporting by Sayed Hassib, writing Sakshi Dayal and editing Kate Mayberry.
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India's JioStar terminates Bangladesh IPL cricket broadcast deal, letter shows
Documents seen by the.. In January, Bangladesh banned IPL broadcasts. This was after Kolkata Knight Riders dropped Bangladesh pacer Mustafizur Rahman at the Indian Cricket Board's request. Tensions between the two nations were rising following the murder of a Hindu in Bangladesh. Even though Bangladesh is reviewing its ban, and said on Saturday that any further action will depend on the 'opinion of its sports minister,' the termination by JioStar will mean there will be no broadcaster local for the upcoming IPL season even if it were to change their stance. The agreement is terminated immediately," JioStar stated in a letter dated 17 February to Bangladesh broadcaster TSports. TSports had sublicensed rights from JioStar for IPL season from 2023-2027. The company said that its partner "continued to fail and default" in adhering the agreed payment deadlines. JioStar, the joint venture between Ambani’s Reliance Group and Walt Disney did not reply to questions. TSports, Bangladesh's sport and information ministries and the Ambani-owned Reliance did not reply to queries. IPL is the richest cricket league in the world, valued at $18.5 billion. It is hugely popular in Bangladesh where cricket is a passion, just like in the rest of the subcontinent. The latest season began on March 28. India-Bangladesh ties have been strained ever since the 'political transition' in 'Dhaka on August 20, 2024, which disrupted close ties between Sheikh Hasina and former Prime Minister. Hasina fled to New Delhi following a "mass uprising" in response. There are signs that the relations have thawed since Tarique Rahman said, in February, that Bangladesh will engage with its neighbours on the basis mutual respect and shared interests. In a separate JioStar email, also dated 'February 17', the company also announced that it had terminated the broadcasting deals for the Women’s Premier League Cricket Tournament in Bangladesh due to similar defaults. Reporting by Praveen Parmasivam, Dhaka, and RumaPaul in Chennai; editing by Aditya Koyyur and Arun Kalra
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South Korea confirms imports of Russian naphtha
The South Korean Industry Ministry confirmed the import of 27,000 tons of Russian naphtha arriving on Monday. The ministry refused to confirm the destination of the shipment or if it was for one South Korean company or multiple firms. Local media reported that this is the first time South Korea imports Russian?naphtha after the beginning of the Iran War. Local media reported that the industry ministry is working with the South Korean Foreign Ministry to secure additional supplies of Russian naphtha. Naphtha, a refined oil-based product, is typically used as a feedstock by petrochemical manufacturers and is also a key ingredient in plastics. The ministry said that although South?Korean firms are also trying hard to secure Russian crude, they haven't been successful yet. Ahn Dogeol of the ruling party, who attended a meeting on the economic impact of the Middle East Crisis, said that another problem is a shortage in synthetic resin, which is used to create plastic products and glues. The industry ministry was looking into ways such as limiting the exports of this material. Reporters at the parliament were told that the government was preparing measures to 'prioritise' key sectors such as healthcare, where plastics are used in many different ways, including medical procedures, or everyday necessities, should the war continue, and it'releases domestic oil reserves, or expands supply of petrochemicals,' lawmakers said. Reporting by Heejin Shim, Kyu-seok Kim and Joyce Lee. Editing by Christian Schmollinger & Kate Mayberry.
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Stocks in Europe hold steady ahead of inflation data
European shares were little changed on Monday, ahead of a local inflation report. Investors also continued to watch the Middle East conflict that has impacted global markets. As of 0809 GMT, the pan-European STOXX 600 index was flat at 574.98. Defense sector was the worst hit with a 0.8% drop. The focus is on Germany's CPI data and HICP numbers due later in the day, to gauge the effect of the war on Europe’s largest economy. The Middle East conflict has pushed oil prices higher, causing inflation fears. This is pushing Europe's STOXX600 toward its steepest drop since March 2020. The conflict is escalating and the Houthi militia, which is backed by Iran, has fired missiles towards Israel. This escalates the conflict, and fuels fears that shipping lanes will be disrupted further. Brent Crude soared to $115 per barrel Monday. It is still too early to talk about dates for interest rate hikes. According to Francois Villeroy de Galhau, the French central bank head, it is important to stop any energy-driven inflation spreading. INWIT, a stock that is traded by individuals, fell 3.1% when Telecom Italia announced it had terminated a long-term "lease" contract with Italy's largest mast operator. The UK-listed shares of Rio Tinto rose nearly 5%, after the miner announced that operations had resumed at three of 'its four Pilbara Iron Ore Port Terminals' after 'Tropical Cyclone Narelle' swept across Western Australia's Pilbara Region. This helped boost London's FTSE 100 by 0.2%. Reporting by Avinash in Bengaluru, Editing by Sonia Cheema
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Consultancy says that rising Ukrainian diesel imports will prevent a shortage in April.
Analysts do not expect a fuel shortage in Ukraine next month. After Russian missile strikes virtually destroyed Ukraine's refining capability, the country became almost completely dependent on fuel imported from Europe, particularly western, central, and southern Europe. Enkorr fuel consultancy in Kyiv said that the average daily diesel deliveries over a 'four-day period from 23 March 'to 26 March 'were 21,400 metric tonnes, up from 19,400 tons during the same time last week. The consultancy stated that if the current pace is maintained, imports in March could reach 565,000 tons. This would be 9% more than the 522,000 ton estimate and a 7% increase over the same period of last year. It added that there is no risk of shortage. This was confirmed by traders. Last week, the Ukrainian energy ministry said that the diesel market had been fully supplied in March. About 70% of April's supply was also secured. Enkorr reported this month that traders estimated the wholesale diesel price increase 'because of the Middle East war' at almost 50% in less than one month. (Reporting and editing by David Goodman.)
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Gold prices rise on the back of a weaker dollar but Fed rate cuts dimming hopes limit growth
Gold prices rose on Monday, as the dollar softened. However, gains were limited by a surge in energy costs that fueled inflation fears and dimmed expectations of interest rate reductions from the U.S. Federal Reserve this year. Gold spot rose 0.8%, to $4,528.74 an ounce at 0627 GMT. It had fallen about 1% in the previous session. U.S. Gold Futures for April Delivery gained 0.7%, to $4,556.70. Dollar-denominated goods are now more affordable to holders of other currencies. Gold's price movement last week, when it broke a three-week losing run, suggested that oversold behavior was at play and a possible reversal in recent declines. This must be confirmed this week by the price. It's easy to anticipate volatility, given the rapid flow headlines," said?Nicholas Frappell. Global head of institutional market at ABC Refinery. Brent crude soared to $115 per barrel after the Yemeni Houthis launched an attack?on Israel at the weekend. This widened the war and exacerbated inflation problems. The contract has risen 60% in March so far, which is a record monthly increase. The traders see little likelihood of a rate cut in the United States this year as higher energy costs threaten to fuel broader inflation, and limit scope for monetary ease. This compares to?expectations of two rate cuts prior to the start of the conflict. Gold's appeal is boosted by inflation, but high interest rates reduce its demand. Markets are now awaiting Federal Reserve Chair Jerome Powell’s remarks at an event held by Harvard later that day, as well as John Williams, the New York Fed president. The U.S. Dollar, which has gained more than 2% in the past two months since the U.S. and Israeli war against Iran began on the 28th of February, has been a major factor. Bullion has risen about 5% this quarter. The biggest macro-picture?behind this underperformance is the massive shift in interest rate expectations... Frappell said that the USD has reacted to this. Spot silver increased 1.5% to $70.61 an ounce. Spot palladium increased 3% and platinum rose 3.4%. (Reporting and editing by Sumana Nandy, Harikrishnan Nair, and Noel John from Bengaluru)
Trump considers other measures to cool down oil prices, including easing Russia sanctions
Multiple sources claim that Donald Trump may announce an announcement as early as Monday evening to curb the soaring global oil prices in light of the conflict with Iran. According to multiple sources, the White House is concerned that the spike in oil prices after more than a week of U.S.-Israeli strikes on Iran could hurt U.S. consumers and businesses ahead of November's midterm elections when Trump and his fellow Republicans hope they can retain control of Congress.
Two sources familiar with the situation said that Trump was in Florida to address congressional Republicans who were gathered at an annual retreat. He would be expected to consider his options by Monday.
The White House has added a press event to Trump's Monday schedule at 5:30 pm, but did not provide any details as to whether or not he would make an announcement.
Analysts and officials in the oil industry have stated that the White House does not have many tools to curb the rising price of oil unless it can restore the flow of tanks through the Strait of Hormuz. This narrow waterway connects Iran with Oman and carries a fifth of world's supply of crude.
One of the sources who has been working with the White House to implement the initiative said, "the problem is that options?range from being marginal or symbolic up to being deeply unwise."
Trump is sensitive to the turmoil on energy markets, as it comes at a time when he has been trying to?keep fuel prices low' in order to send a strong economic message. The rise in fuel and oil prices could have a ripple effect on the economy and increase consumer and transportation costs.
RUSSIAN SANCTIONS
According to sources, reducing sanctions against Russia was one of the policy options.
This could boost oil supplies in the world at a moment when Middle East shipments are being disrupted by the growing conflict with Iran. This could complicate U.S. attempts to deny Russia revenue from its war in Ukraine. Three anonymous sources said that such a move would include a broad relief of sanctions as well as targeted options which would allow countries like India to purchase Russian oil without worrying about U.S. penalties.
Kirill Dmitriev, the special presidential envoy for investment in Russia, wrote on X that he and the U.S. were discussing lifting U.S. oil sanctions. He added that "Western sanctions are detrimental to the global economy."
The White House stated that any announcements on Russia policy would be made directly by Trump or members of his team. U.S. officials have been in separate discussions with counterparts of the Group of Seven countries about a potential joint release of crude from strategic reserves. Energy Secretary Chris Wright confirmed Monday that the U.S. was considering coordinating the sales of oil from its Strategic Petroleum Reserve. However, no decision has been made. The U.S. is not considering "imposing restrictions on the exports of U.S. Energy as a means to control prices," he added. Trump has other policy options, including intervening in the oil futures market, waiving some federal taxes, and lifting restrictions under 'the Jones Act', which mandates that domestic fuel only be transported on ships flying the U.S. flag, according to sources who spoke on condition of anonymity.
Trump says 'a very small price' to pay. In a Sunday post on the social media platform Truth Social, Trump downplayed a price spike, saying it will only be temporary.
He said that only "fools" could see it differently.
The White House stated that Trump has a solid game plan to keep energy markets stable, and is reviewing credible options.
Since the U.S.-Israeli strikes began on February 28, global crude oil prices are at levels they have not been seen since mid-2022. Gasoline and other fuels costs have also risen. Last week, the White House asked federal agencies for proposals to help ease pressure on gasoline and crude oil prices. Sources said that top White House officials are involved in the discussions, including White House Chief Staff Susie Wiles, and Stephen Miller as top advisor.
The White House's plan to provide backstop insurance and naval escorts for tankers travelling the Strait of Hormuz has so far failed to increase shipping through this vital waterway. (Reporting and editing by Will Dunham; Additional reporting by Nandita BOSE in Miami; Will Dunham, Nick Zieminski, David Gregorio).
(source: Reuters)