Latest news with #Kloza
Yomiuri Shimbun
10 hours ago
- Business
- Yomiuri Shimbun
Oil Rises and US Stock Futures Slip as Markets React to US Strike on Iran Nuclear Sites
NEW YORK (AP) — The price of oil rose and U.S. stock futures fell as global markets react to the U.S. strike against nuclear targets in Iran. The price of Brent crude oil, the international standard, rose 2.6% to $79 a barrel. U.S. crude rose 2.6% to $75.76 a barrel. On Saturday, U.S. forces attacked three Iranian nuclear and military sites, further increasing the stakes in the war between Israel and Iran. Futures for the S&P 500 and the Dow Jones Industrial Average slipped 0.3%, while Nasdaq futures fell 0.5%. Treasury yields were little changed. The modest moves indicate markets are taking the latest development in stride. The conflict, which began with an Israeli attack against Iran on June 13, has sent oil prices yo-yoing, which has in turn caused see-saw moves for the U.S. stock market, because of rising and ebbing fears that the war could disrupt the global flow of crude. Iran is a major producer of oil and also sits on the narrow Strait of Hormuz, through which much of the world's crude passes. An Iran retaliation that included closing off the waterway would be technically difficult to pull off but traders are afraid Iran could severely disrupt transit through it, sending insurance rates spiking and making shippers nervous to move without U.S. Navy escorts Some analysts think Iran is unlikely to close down the waterway because the country uses it to transport its own crude, mostly to China, and oil is a major source of revenue for the regime. 'It's a scorched earth possibility, a Sherman-burning-Atlanta move,' said Tom Kloza, chief market analyst at Turner Mason & Co. 'It's not probable.' Kloza thinks oil futures will ease back down after initial fears blow over. Ed Yardeni, a long-time analyst, agreed, writing in a report that Tehran leaders would likely hold back. 'They aren't crazy,' he wrote in a note to investors Sunday. 'The price of oil should fall and stock markets around the world should climb higher.' Other experts aren't so sure. Andy Lipow, a Houston analyst covering oil markets for 45 years, said countries are not always rational actors and that he wouldn't be surprised if Tehran lashed out for political or emotional reasons. 'If the Strait of Hormuz was completely shut down, oil prices would rise to $120 to $130 a barrel,' said Lipow, predicting that that would translate to about $4.50 a gallon at the pump and hurt consumers in other ways. 'It would mean higher prices for all those goods transported by truck, and it would be more difficult for the Fed to lower interest rates.'
The Hill
11 hours ago
- Business
- The Hill
Oil rises and US stock futures slip as markets react to US strike on Iran nuclear sites
NEW YORK (AP) — The price of oil rose and U.S. stock futures fell as global markets react to the U.S. strike against nuclear targets in Iran. The price of Brent crude oil, the international standard, rose 2.6% to $79 a barrel. U.S. crude rose 2.6% to $75.76 a barrel. On Saturday, U.S. forces attacked three Iranian nuclear and military sites, further increasing the stakes in the war between Israel and Iran. Futures for the S&P 500 and the Dow Jones Industrial Average slipped 0.3%, while Nasdaq futures fell 0.5%. Treasury yields were little changed. The modest moves indicate markets are taking the latest development in stride. The conflict, which began with an Israeli attack against Iran on June 13, has sent oil prices yo-yoing, which has in turn caused see-saw moves for the U.S. stock market, because of rising and ebbing fears that the war could disrupt the global flow of crude. Iran is a major producer of oil and also sits on the narrow Strait of Hormuz, through which much of the world's crude passes. An Iran retaliation that included closing off the waterway would be technically difficult to pull off but traders are afraid Iran could severely disrupt transit through it, sending insurance rates spiking and making shippers nervous to move without U.S. Navy escorts Some analysts think Iran is unlikely to close down the waterway because the country uses it to transport its own crude, mostly to China, and oil is a major source of revenue for the regime. 'It's a scorched earth possibility, a Sherman-burning-Atlanta move,' said Tom Kloza, chief market analyst at Turner Mason & Co. 'It's not probable.' Kloza thinks oil futures will ease back down after initial fears blow over. Ed Yardeni, a long-time analyst, agreed, writing in a report that Tehran leaders would likely hold back. 'They aren't crazy,' he wrote in a note to investors Sunday. 'The price of oil should fall and stock markets around the world should climb higher.' Other experts aren't so sure. Andy Lipow, a Houston analyst covering oil markets for 45 years, said countries are not always rational actors and that he wouldn't be surprised if Tehran lashed out for political or emotional reasons. 'If the Strait of Hormuz was completely shut down, oil prices would rise to $120 to $130 a barrel,' said Lipow, predicting that that would translate to about $4.50 a gallon at the pump and hurt consumers in other ways. 'It would mean higher prices for all those goods transported by truck, and it would be more difficult for the Fed to lower interest rates.'
The Mainichi
11 hours ago
- Business
- The Mainichi
Oil rises and US stock futures slide as markets react to US strike on Iran nuclear sites
NEW YORK (AP) -- The price of oil rose and U.S. stock futures fell as global markets react to the U.S. strike against nuclear targets in Iran. The price of Brent crude oil, the international standard, rose 2.6% to $79 a barrel. U.S. crude rose 2.6% to $75.76 a barrel. On Saturday, U.S. forces attacked three Iranian nuclear and military sites, further increasing the stakes in the war between Israel and Iran. Futures for the S&P 500 and the Dow Jones Industrial Average slipped 0.3%, while Nasdaq futures fell 0.5%. Treasury yields were little changed. The modest moves indicate markets are taking the latest development in stride. The conflict, which began with an Israeli attack against Iran on June 13, has sent oil prices yo-yoing, which has in turn caused see-saw moves for the U.S. stock market, because of rising and ebbing fears that the war could disrupt the global flow of crude. Iran is a major producer of oil and also sits on the narrow Strait of Hormuz, through which much of the world's crude passes. An Iran retaliation that included closing off the waterway would be technically difficult to pull off but traders are afraid Iran could severely disrupt transit through it, sending insurance rates spiking and making shippers nervous to move without U.S. Navy escorts Some analysts think Iran is unlikely to close down the waterway because the country uses it to transport its own crude, mostly to China, and oil is a major source of revenue for the regime. "It's a scorched earth possibility, a Sherman-burning-Atlanta move," said Tom Kloza, chief market analyst at Turner Mason & Co. "It's not probable." Kloza thinks oil futures will ease back down after initial fears blow over. Ed Yardeni, a long-time analyst, agreed, writing in a report that Tehran leaders would likely hold back. "They aren't crazy," he wrote in a note to investors Sunday. "The price of oil should fall and stock markets around the world should climb higher." Other experts aren't so sure. Andy Lipow, a Houston analyst covering oil markets for 45 years, said countries are not always rational actors and that he wouldn't be surprised if Tehran lashed out for political or emotional reasons. "If the Strait of Hormuz was completely shut down, oil prices would rise to $120 to $130 a barrel," said Lipow, predicting that that would translate to about $4.50 a gallon at the pump and hurt consumers in other ways. "It would mean higher prices for all those goods transported by truck, and it would be more difficult for the Fed to lower interest rates."
San Francisco Chronicle
12 hours ago
- Business
- San Francisco Chronicle
Oil rises and US stock futures slide as markets react to US strike on Iran nuclear sites
NEW YORK (AP) — The price of oil rose and U.S. stock futures fell as global markets react to the U.S. strike against nuclear targets in Iran. The price of Brent crude oil, the international standard, rose 3.3% to $79.60 a barrel. U.S. crude rose 3.1% to $76.16 a barrel. On Saturday, U.S. forces attacked three Iranian nuclear and military sites, further increasing the stakes in the war between Israel and Iran. Futures for the S&P 500 fell 0.5%, while futures for the Dow Jones Industrial Average slipped 0.4%. Treasury yields fell slightly. The modest moves indicate markets are taking the latest development in stride. The conflict, which began with an Israeli attack against Iran on June 13, has sent oil prices yo-yoing, which has in turn caused see-saw moves for the U.S. stock market, because of rising and ebbing fears that the war could disrupt the global flow of crude. Iran is a major producer of oil and also sits on the narrow Strait of Hormuz, through which much of the world's crude passes. An Iran retaliation that included closing off the waterway would be technically difficult to pull off but traders are afraid Iran could severely disrupt transit through it, sending insurance rates spiking and making shippers nervous to move without U.S. Navy escorts Some analysts think Iran is unlikely to close down the waterway because the country uses it to transport its own crude, mostly to China, and oil is a major source of revenue for the regime. 'It's a scorched earth possibility, a Sherman-burning-Atlanta move,' said Tom Kloza, chief market analyst at Turner Mason & Co. "It's not probable.' Kloza thinks oil futures will ease back down after initial fears blow over. Ed Yardeni, a long-time analyst, agreed, writing in a report that Tehran leaders would likely hold back. 'They aren't crazy,' he wrote in a note to investors Sunday. 'The price of oil should fall and stock markets around the world should climb higher.' Other experts aren't so sure. Andy Lipow, a Houston analyst covering oil markets for 45 years, said countries are not always rational actors and that he wouldn't be surprised if Tehran lashed out for political or emotional reasons. 'If the Strait of Hormuz was completely shut down, oil prices would rise to $120 to $130 a barrel,' said Lipow, predicting that that would translate to about $4.50 a gallon at the pump and hurt consumers in other ways. 'It would mean higher prices for all those goods transported by truck, and it would be more difficult for the Fed to lower interest rates.'
Yahoo
05-03-2025
- Business
- Yahoo
Tariff impacts on diesel prices will likely hit New England first
New England will probably be ground zero for observing how a 10% tariff on Canadian crude and refined product exports to the U.S. hits prices at the pump. While Mexico is also facing those tariffs, that country is mostly an exporter of crude to the U.S. Along with significant Canadian crude exports to the U.S., it may take an undetermined amount of time for imports on a raw material like crude to show up in a retail diesel or gasoline price. (Mexico's tariff is 25%). However, New England is likely to be a bellwether because it is particularly dependent on imports of refined products from Canada. Tthat product reaches the U.S. from refineries in the Eastern provinces of Canada, like the Irving Oil (OTS: IRVRF) refinery in Saint John, New Brunswick, across the border from example, in December, the latest month for which data is available, the regional district designated by the U.S. government as PADD 1 – which includes all of the East Coast – imported a little more than 1 million barrels a day of refined products from Canada. That data was not broken down by state. But given that PADD 1 stretches from Florida to Maine, the Middle Atlantic and Southeastern states can be supplied by pipelines from the Gulf of Mexico area and there are refineries in the New York-Philadelphia corridor. There are no refineries in New England, so it can be assumed that a large percentage of those Canadian product imports into PADD 1 are headed to New England. The first sign that New England is going to be on the front lines of tariffs' impact came from Irving Oil. Patrick DeHaan, the head of petroleum analysis at retail fuel analysis company GasBuddy, and Tom Kloza, head of energy analysis at OPIS, said Irving had increased its wholesale diesel prices throughout much of New England by about 20 cents a gallon as of 12:01 a.m. Tuesday. That was not justified by any movement in the futures price of ultra low sulfur diesel on the CME commodity exchange. ULSD has been trending flat to lower, with a large drop Wednesday of 4.64 cents a gallon to settle at $2.2408. The price was under $2.20 a gallon earlier in the day. Wholesale prices are known in the industry as rack prices. Kloza said diesel rack prices in New England had been running about $2.40 a gallon. A 10% tariff would have added about 24 cents to the price, and both DeHaan and Kloza said the increases at Irving were about that prices change frequently, almost every day and sometimes multiple times per day in a particularly volatile market. The correlation with movements in futures markets is high. Kloza said Wednesday he had not seen further increases by other suppliers. As he also noted, the move makes Irving immediately uncompetitive. The Irving Oil move is a starting point for speculation about how the tariffs might play out in the PADD 1 refined products markets, with its potential for the most immediate short-term disruption. Would other suppliers rise to meet the higher level of a company like Irving so tied to Canadian imports? Or would they look to source as much nontariff supply as possible, giving them a competitive advantage over Canadian supplies. In a statement released in early February, with its eye on upcoming tariffs, Irving addressed what it saw as the likely impact. 'The majority of the product produced at our Saint John refinery is bound for the U.S. market, reinforcing our company's critical role as a contributor to Canadian-refined petroleum exports to the U.S. annually,' it said. 'This tariff will result in price increases for our U.S. customers and have impacts on energy security and the broader economy. Given the importance of safeguarding the energy supply chain, we urge all stakeholders within government and industry to come together and work toward a resolution as soon as possible.' Conversations with several refined product experts expanded on the questions in the market that most will admit they do not have the answers to now but can be a source of speculation. Rearranging supply lines: Although Canada supplies a great amount of imported refined products to PADD 1, it doesn't supply all of it. PADD 1 in December imported about 1 million barrels a day of refined products. Canada supplied about 40% of Netherlands, and its giant refining sector in Rotterdam and Amsterdam, was behind Canada in December at 100,000 barrels a day exported into PADD 1. The United Kingdom exported 47,000 barrels daily. The Department of Energy/Energy Information Administration also reports thousands of barrels per day of movements between other PADD districts to PADD 1. How might this be affected? Canada could export its products out of places like Saint John to Europe, and Europe could in turn send more products to the U.S. It adds to inefficiency, because it tacks on shipping costs that become necessary only because of tariff evasion. So it isn't free. But it would avoid the tariffs. Whether it is cost-competitive to do that will depend on numerous factors: shipping rates, the outright price of oil, etc. Shipments of more products to the Northeast from the Gulf Coast could be inhibited by a lack of space on pipelines such as the Colonial, which stretches in a crescent from the Houston area through the mid-Atlantic and into the New York region. (Product can move into New England on barges after it reaches New York Harbor as the pipeline does not go any farther north than New York.) U.S. products moved via tanker from the Gulf region to New England to make up for displaced Canadian imports would need to be transported on Jones Act ships, U.S.-flagged vessels that generally have significantly higher costs than international shipping rates. The Jones Act requires that any product moved between two U.S. ports must travel on a U.S.-flagged vessel. The musical chairs can go on endlessly: U.S. exports ramp up to backfill the increased European exports of refined products that are going to New England to substitute for Canadian product imports that carry a tariff into the U.S., so they are going elsewhere. Making these movements profitable is what high-priced traders get paid to figure out. Fuel surcharge impacts: If a fleet in New England has a fuel surcharge tied to the weekly average retail price published by the EIA, the potential for 'basis risk' grows significantly if New England prices soar even further above the national average. Basis risk describes a situation in which a company has a price benchmark to measure or conduct economic activity, but the benchmark is an imperfect representation of a company's exposure to that price. A fuel surcharge can be constructed to compensate for that. But if the basis risk between the real world and the benchmark goes haywire – for example, if something like tariffs suddenly make a price rise relative to the rest of the diesel world – the fuel surcharge can improperly reflect a carrier's costs. There is already a large gap between the national average retail diesel price – $3.635 a gallon as of Monday – and the average price in New England, which the DOE/EIA put at $4.037, also on Monday. That New England price will be closely watched. What about the rest of the country? Canada supplies 100% of all crude imports to PADD 2, which consists primarily of the Upper Midwest states. In December, PADD 2 imported 2.9 million barrels a day of Canadian crude. The EIA lists PADD 2 refining capacity at 4.25 million barrels a day. Some of it travels by rail but most travels through pipelines. The ability of PADD 2 to substitute Canadian crude with something else is limited. Pipelines that in the past took imported crude out of the Gulf of Mexico and into the nation's heartland, like the Capline, have been reversed in recent years to take the growing supply of crude from Canada and places like North Dakota to the Gulf Coast refining center or for export. DeHaan said it would take time for a 10% tariff on those crude imports to show up in wholesale or refined prices. 'It will take a couple of weeks to get to refiners to be processed,' he said. 'So I would expect a vastly different impact and speed than the Northeast, where you're talking about tariffs on refined products, which is very much a just-in-time product.' The physical connectivity between the Upper Midwest and Canada is why the impact on Mexican imports doesn't get talked about as much as Canada. Mexican exports to the U.S. of crude and products totaled 517,000 barrels a day in December, according to the EIA. All of it is waterborne and can get rerouted somewhere else to avoid a U.S. tariff. But that brings in the same problem as the rearranging of Canadian exports: The most economically efficient moves in the market, based on such aspects as crude and product quality and length of shipment, get pushed aside in favor of movements whose primary goal is to avoid a tariff. More articles by John Kingston Penske Truck Leasing hangs on to investment-grade debt rating from Moody's XPO lawsuit against 2 ex-employees gives look into noncompete agreements 'What did these men do?' judge asks in throwing out indictment of NFI's Brown The post Tariff impacts on diesel prices will likely hit New England first appeared first on FreightWaves.
