Latest news with #PVM
Mint
2 hours ago
- Business
- Mint
Wall Street choppy, oil dips as US holds back from Mideast military action
NEW YORK (Reuters) -Major Wall Street indexes closed lower on Friday while oil prices fell after U.S. President Donald Trump held back from immediate military action in the Israel-Iran conflict. All eyes remained trained on the Middle East one week after an initial Israeli assault drew Iranian retaliation. The U.S. imposed Iran-related sanctions a day after Trump said he might take two weeks to decide on further action. According to preliminary data, the S&P 500 lost 0.21%, while the Nasdaq Composite shed 0.49%. The Dow Jones Industrial Average, however, rose 38.47 points, or 0.09%, to 42,210.13. Stocks had been broadly positive at the open, and dipped in and out of negative territory during the session. Global benchmark Brent crude futures fell 2.3% to settle at $77.01 a barrel, but gained 3.6% in the week. Front-month U.S. crude - which did not settle on Thursday due to a U.S. holiday and expires on Friday - ended down 0.28% at $74.93, with a weekly gain of 2.7%. [O/R] "Investors are a little bit nervous about buying stocks right in front of this situation and, more specifically, right in front of this weekend," said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey. The new sanctions target entities, individuals and vessels providing Iran with defence machinery, and were seen as a sign of a diplomatic approach from the Trump administration. "However, while Israel and Iran carry on pounding away at each other, there can always be an unintended action that escalates the conflict and touches upon oil infrastructure," PVM analyst John Evans said. European foreign ministers urged Iran to engage with the U.S. over its nuclear programme after high-level talks in Geneva about a potential new nuclear deal ended with little sign of progress. Europe's main bourses [.EU] had ended their session a touch higher, following similar gains across Asia. MSCI's gauge of stocks across the globe fell 0.01% on the day. Gains on Hong Kong's Hang Seng, and South Korea's Kospi linked to newly elected President Lee Jae Myung's stimulus, had boosted Asian shares during that session. Federal Reserve policymakers made their first public comments since Chair Jerome Powell said on Wednesday that borrowing costs were likely to fall this year, but that he expects "meaningful" inflation ahead as Trump's tariffs raise prices for consumers. The close split between governors on how to manage the risks was in full view as Governor Christopher Waller said the central bank should consider cutting as soon as the next meeting, while the Richmond Fed's Tom Barkin said there was no urgency to cut. Powell had also cautioned on Wednesday against holding on too strongly to the forecasts. Treasury yields fell after Waller's comments, and as concerns about the Middle East conflict supported demand for safe haven bonds. The yield on benchmark 10-year notes fell 2 basis points to 4.375%, from 4.395% late on Wednesday. Demand rose for the U.S. dollar, pushing the greenback to a three-week high against the yen. The dollar rose 0.03% against a basket of currencies including the yen and the euro , with the euro up 0.3% at $1.1528. The index is poised to rise 0.6% this week. Prices for gold, another traditional refuge, fell 0.13% to $3,365.91 and were poised for a weekly loss. (Reporting by Isla Binnie in New York, additional reporting by Caroline Valetkevitch, Karen Brettel and Georgina McCartney, Editing by Louise Heavens, Rod Nickel and Marguerita Choy)
Business Recorder
8 hours ago
- Business
- Business Recorder
Oil prices fall as US delays decision on direct Iran involvement
SINGAPORE: Oil prices fell on Friday after the White House delayed a decision on U.S. involvement in the Israel-Iran conflict yet they remained on course for a third consecutive weekly rise. Brent crude futures were down $2.57, or around 3.3%, to $76.28 a barrel by 1204 GMT but still set to gain nearly 3% on the week. U.S. West Texas Intermediate crude for July – which did not settle on Thursday as it was a U.S. holiday and expires on Friday - was up marginally at $75.19. The more liquid August contract was up around 0.4%, or 31 cents, to $73.19. On Thursday prices jumped almost 3% after Israel bombed nuclear targets in Iran, while Iran - OPEC's third-largest producer - fired missiles and drones at Israel. Neither side showed any sign of backing down in the week-old war. Brent prices retreated after the White House said President Donald Trump would decide whether the U.S. will get involved in the Israel-Iran conflict in the next two weeks. Oil prices jump 'However, while Israel and Iran carry on pounding away at each other there can always be an unintended action that escalates the conflict and touches upon oil infrastructure,' PVM analyst John Evans said. Iran has in the past threatened to close the Strait of Hormuz, a vital route for Middle East oil exports. However, oil exports so far have not been disrupted and there is no shortage of supply, said Giovanni Staunovo, an analyst at UBS. 'The direction of oil prices from here will depend on whether there are supply disruptions.' An escalation of the conflict in such a way that Israel attacks export infrastructure or Iran disrupts shipping through the strait could lead to $100 per barrel of oil being a reality, said Panmure Liberum analyst Ashley Kelty.
CNBC
2 days ago
- Business
- CNBC
Oil analysts left scratching their heads over Isreal-Iran conflict: 'Your guess is as good as mine'
Analysts are struggling to predict the extent to which Israel and Iran's escalating conflict could influence oil prices. Israel's surprise attack on Iran's military and nuclear infrastructure on Friday has been followed by five days of spiraling warfare between the regional foes. U.S. President Donald Trump on Tuesday called for an "unconditional surrender" from Tehran, warning Washington's patience was wearing thin. Energy markets are weighing the likelihood of direct U.S. involvement in the conflict, as well as the potential for major supply disruptions — particularly worst-case scenarios, such as Iran blocking the highly strategic Strait of Hormuz that links the Persian Gulf to the Gulf of Oman. John Evans, an analyst at oil broker PVM, said Wednesday that a "blanket of unease" had descended upon oil markets in recent days. "Our market is settling into a world where missile exchanges are commonplace but the cynicism of it being normal has yet to set in because of how easily the situation could escalate," Evans said in a research note. Israel's Bazan oil refinery complex sustained damage from an Iranian attack earlier this week, while an Israeli airstrike at the South Pars field, the world's largest gas field, prompted Tehran to partially suspend production. The South Pars gas field is shared between Iran and Qatar. "The situation is as fluid as the underlying commodity it mostly affects and while there is a fraternal 'your guess is [as] good as mine' in future price divination, positioning will continue to be at least defensively long," PVM's Evans said. The chief executives of oil companies of TotalEnergies, Shell, and EnQuest told CNBC on Tuesday that further attacks on critical energy infrastructure could have serious consequences for global supply and prices. Oil prices, which have jumped in recent days, extended gains on Wednesday. International benchmark Brent crude futures with August delivery stood 0.5% higher at $76.79 per barrel at 12:32 p.m. London time. U.S. West Texas Intermediate futures with July delivery traded up 0.5% at $75.19 per barrel. Per Lekander, founder of investment management firm Clean Energy Transition, described the situation for oil markets ahead of Israel's attack on Iran last week as "bad," given plentiful supply growth from OPEC and non-OPEC producers and soft demand. "I was increasingly convinced we were heading for a 2014/2020 reset lower to $30-50 to get capex down and start a new cycle. In fact, the current conflict makes that outcome even more likely when [the] conflict is over as producers are now producing and hedging as much as they can," Lekander said in a note. "While this is going on it is a roulette. We have a $10 [per barrel] risk premium in the price which is fair given that there clearly are some interruptions (mainly Iran exports and some lower tanker loadings)," he added. Looking ahead, Stephen Schork, editor of The Schork Report, on Wednesday said that a significant escalation in the Israel-Iran conflict could push oil prices substantially higher. "We're kind of stabilizing right now. I think we're waiting for that next headline to come out and really, I think that anyone who does not think oil could go higher, I really think they are trading on hope and not reality," Schork told CNBC's "Access Middle East." "We are now facing the biggest threat to the oil markets since Iraq invaded Kuwait in 1990 and perhaps even greater than the 1974 Arab oil embargo," he added. Schork said there was a roughly 5% chance of oil prices climbing to above $103 per barrel within the next five weeks, with much longer odds of crude soaring as high as $160 per barrel by the end of summer, if flows out of the Persian Gulf are seriously disrupted.
Yahoo
5 days ago
- Business
- Yahoo
Traders Dive Into Options Market as Geopolitical Risk Flares
(Bloomberg) -- Israel's air strikes on Iran, followed by the Islamic Republic's retaliation, rippled through markets Friday, prompting traders to pile into options for protection. Shuttered NY College Has Alumni Fighting Over Its Future NYC Renters Brace for Price Hikes After Broker-Fee Ban As Part of a $45 Billion Push, ICE Prepares for a Vast Expansion of Detention Space Do World's Fairs Still Matter? As American Architects Gather in Boston, Retrofits Are All the Rage Oil futures surged the most since 2020 and gold neared its all-time high in a rush to a safe haven. On the flip side, equities sold off on concern the conflict could widen, and that higher crude prices will boost inflation, keeping the Federal Reserve from lowering rates. The big questions are how long the conflict will last and how much it will spread. Besides the risk of supply disruptions in top oil producer Iran, an intensifying conflict could threaten some 11% of global seaborne trading volume that transits the Strait of Hormuz. 'The escalation between Israel and Iran, including strikes on nuclear and military targets, marks a turning point in Middle Eastern geopolitics and its ripple effects are already being felt across global markets,' said Tamas Varga, an analyst at energy brokerage PVM. 'The Strait of Hormuz — through which 20 million barrels of oil pass daily — now sits on a geopolitical knife's edge.' Here are some of the ways traders are positioning for the uncertainty gripping markets: OIL As tensions ratcheted up in the days leading up to the attack, some analysts had speculated that a strike could push prices well over $100 a barrel. Traders snapped up bullish call options, a pattern that went into overdrive once Israeli planes started dropping bombs after markets opened Friday in Asia. Brent and West Texas Intermediate crude's implied volatility soared as futures spiked as much as 14%. The panic buying of call options pushed the bullish premium to levels not seen since Russia's invasion of Ukraine in 2022, with the retaliatory strike drawing additional bidding. 'The way speculators play it is to buy whatever calls are on the screen as fast as possible with no regard for how much they are paying,' said Robert Yawger, director of the energy futures division at Mizuho Securities USA. 'Not to mention some speculators are hedging against a short position.' The ramifications extend beyond flat price, with the shape of the forward curve changing drastically in just a few days, affecting millions of barrels of so-called WTI calendar spread options betting on the difference between delivery months. The unusual 'hockey-stick' shape that reflected fears of a glut of oil next year has given way to a backwardated market, where traders pay up for immediate delivery. Open interest in these options reached a record high Thursday, with positions spread across a wide range of levels. GOLD The rush into gold during the tariff turmoil of April is recurring to a smaller extent as geopolitics bubble up. The one-month call skew on the SPDR Gold Shares ETF (GLD) has risen to the highest since April 16 as the metal flirts once again with a record high. 'Any time there is geopolitical escalation investors are going for risk-off investments' such as gold, said Phil Streible, chief market strategist at Blue Line Futures. Investors may expand and move to silver too, according to Streible. STOCKS The latest flare-up in Middle East tensions had the expected impact on equity volatility markets, with the front-month Cboe Volatility Index future taking a strong bid. However, market players have become accustomed to volatility, and moves related to geopolitics tend to fade quickly when de-escalation rhetoric starts. And even with stocks down late on Friday, the drop of more than 1% in the S&P 500 Index will do little to stem the contraction in realized volatility, either on an intraday or closing basis. So long as markets continue to have a playbook for the latest headline risk crisis, owning volatility may continue to disappoint. 'Usually geopolitical events create a knee-jerk reaction that doesn't have much of a lasting impact, unless there's some very specific reason,' said Benn Eifert, managing partner and co-chief investment officer at QVR Advisors. The equity volatility reaction was 'not that big of a move and it will probably dissipate,' he said. US Dollar While the dollar hit a three-year low on Thursday, ahead of this week's Federal Reserve rate decision options positioning already showed signs that the decline was running out of steam. The attack did little to change that. One-month implied volatility on the Bloomberg Dollar Spot Index has been trending lower since early April, and risk reversals Friday were the least bearish since April 9. The resurgence of geopolitical risk comes on top of domestic unrest in parts of the nation and uncertainty over the impact of US economic and trade policies on the economy. 'The events overnight in the Middle East are diverting attention away from immigration protests in the US, trade policy/wars and the focus on the Senate's OBBBA,' said Nicky Shiels, head of metals strategy at Geneva-based MKS PAMP SA. --With assistance from Elise Harris, George Lei, Yvonne Yue Li, Christian Dass, Alex Longley and Bernard Goyder. American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software New Grads Join Worst Entry-Level Job Market in Years As Companies Abandon Climate Pledges, Is There a Silver Lining? US Tariffs Threaten to Derail Vietnam's Historic Industrial Boom ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Business
- Yahoo
Traders Dive Into Options Market as Geopolitical Risk Flares
(Bloomberg) -- Israel's air strikes on Iran, followed by the Islamic Republic's retaliation, rippled through markets Friday, prompting traders to pile into options for protection. Shuttered NY College Has Alumni Fighting Over Its Future NYC Renters Brace for Price Hikes After Broker-Fee Ban As Part of a $45 Billion Push, ICE Prepares for a Vast Expansion of Detention Space Do World's Fairs Still Matter? As American Architects Gather in Boston, Retrofits Are All the Rage Oil futures surged the most since 2020 and gold neared its all-time high in a rush to a safe haven. On the flip side, equities sold off on concern the conflict could widen, and that higher crude prices will boost inflation, keeping the Federal Reserve from lowering rates. The big questions are how long the conflict will last and how much it will spread. Besides the risk of supply disruptions in top oil producer Iran, an intensifying conflict could threaten some 11% of global seaborne trading volume that transits the Strait of Hormuz. 'The escalation between Israel and Iran, including strikes on nuclear and military targets, marks a turning point in Middle Eastern geopolitics and its ripple effects are already being felt across global markets,' said Tamas Varga, an analyst at energy brokerage PVM. 'The Strait of Hormuz — through which 20 million barrels of oil pass daily — now sits on a geopolitical knife's edge.' Here are some of the ways traders are positioning for the uncertainty gripping markets: OIL As tensions ratcheted up in the days leading up to the attack, some analysts had speculated that a strike could push prices well over $100 a barrel. Traders snapped up bullish call options, a pattern that went into overdrive once Israeli planes started dropping bombs after markets opened Friday in Asia. Brent and West Texas Intermediate crude's implied volatility soared as futures spiked as much as 14%. The panic buying of call options pushed the bullish premium to levels not seen since Russia's invasion of Ukraine in 2022, with the retaliatory strike drawing additional bidding. 'The way speculators play it is to buy whatever calls are on the screen as fast as possible with no regard for how much they are paying,' said Robert Yawger, director of the energy futures division at Mizuho Securities USA. 'Not to mention some speculators are hedging against a short position.' The ramifications extend beyond flat price, with the shape of the forward curve changing drastically in just a few days, affecting millions of barrels of so-called WTI calendar spread options betting on the difference between delivery months. The unusual 'hockey-stick' shape that reflected fears of a glut of oil next year has given way to a backwardated market, where traders pay up for immediate delivery. Open interest in these options reached a record high Thursday, with positions spread across a wide range of levels. GOLD The rush into gold during the tariff turmoil of April is recurring to a smaller extent as geopolitics bubble up. The one-month call skew on the SPDR Gold Shares ETF (GLD) has risen to the highest since April 16 as the metal flirts once again with a record high. 'Any time there is geopolitical escalation investors are going for risk-off investments' such as gold, said Phil Streible, chief market strategist at Blue Line Futures. Investors may expand and move to silver too, according to Streible. STOCKS The latest flare-up in Middle East tensions had the expected impact on equity volatility markets, with the front-month Cboe Volatility Index future taking a strong bid. However, market players have become accustomed to volatility, and moves related to geopolitics tend to fade quickly when de-escalation rhetoric starts. And even with stocks down late on Friday, the drop of more than 1% in the S&P 500 Index will do little to stem the contraction in realized volatility, either on an intraday or closing basis. So long as markets continue to have a playbook for the latest headline risk crisis, owning volatility may continue to disappoint. 'Usually geopolitical events create a knee-jerk reaction that doesn't have much of a lasting impact, unless there's some very specific reason,' said Benn Eifert, managing partner and co-chief investment officer at QVR Advisors. The equity volatility reaction was 'not that big of a move and it will probably dissipate,' he said. US Dollar While the dollar hit a three-year low on Thursday, ahead of this week's Federal Reserve rate decision options positioning already showed signs that the decline was running out of steam. The attack did little to change that. One-month implied volatility on the Bloomberg Dollar Spot Index has been trending lower since early April, and risk reversals Friday were the least bearish since April 9. The resurgence of geopolitical risk comes on top of domestic unrest in parts of the nation and uncertainty over the impact of US economic and trade policies on the economy. 'The events overnight in the Middle East are diverting attention away from immigration protests in the US, trade policy/wars and the focus on the Senate's OBBBA,' said Nicky Shiels, head of metals strategy at Geneva-based MKS PAMP SA. --With assistance from Elise Harris, George Lei, Yvonne Yue Li, Christian Dass, Alex Longley and Bernard Goyder. American Mid: Hampton Inn's Good-Enough Formula for World Domination The Spying Scandal Rocking the World of HR Software New Grads Join Worst Entry-Level Job Market in Years As Companies Abandon Climate Pledges, Is There a Silver Lining? US Tariffs Threaten to Derail Vietnam's Historic Industrial Boom ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
