Financial Wire

Oil Stabilizes at Under $100 as US-Iran Talks in Focus

-- Oil prices stabilized at under $100 a barrel on Friday ahead of US-Iran talks in Pakistan as markets sought clarity on whether this weekend's huddle in Islamabad could lead to a long-term peace deal.

West Texas Intermediate crude traded 0.5% higher at $98.25 a barrel on Friday, while Brent added 0.9% to $96.88.

Earlier in the week, the US and Iran agreed to a two-week ceasefire, pausing a war that had spread across the Middle East and curtailed shipments through the crucial Strait of Hormuz. Oil prices on Wednesday posted their sharpest one-day pullback since 2020 following the ceasefire announcement.

The focus now shifts to Islamabad, where officials from Washington and Tehran are expected to meet on Saturday. The truce, which Pakistan helped broker, appeared to be holding so far, though there's uncertainty around the outcome of these talks.

Fighting between Israel and Iran-backed Hezbollah continued in Lebanon, CNN reported Friday. Iran's parliament speaker, Mohammad Bagher Ghalibaf, said talks will begin only if there is a ceasefire in Lebanon and blocked Iranian assets are released.

RBC Capital Markets pointed out uranium enrichment and the lifting of sanctions against Iran as key sticking points heading into the talks.

"Ahead of the weekend's anticipated Islamabad ceasefire talks, we highlight the enrichment and sanctions relief sticking points that will be key points of contention," RBC Head of Global Commodity Strategy Helima Croft wrote in a note emailed Friday.

Washington's zero enrichment demands doomed previous rounds of talks, while Congress will likely push back on any move to lift sanctions on Iran, Croft said.

As part of the ceasefire, Washington demanded the immediate opening of the Strait of Hormuz, while Tehran said it would allow "safe passage" through the waterway, subject to coordination with Iranian authorities.

"Regardless of the outcome of the talks, unblocking the Strait of Hormuz will prove protracted, as a number of countries and companies will resist coordination of passage and payment with Iran," Croft said.

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Tadawul Shares Start Week Lower Amid Continued Middle Eastern Conflict Jitters

The Tadawul All Share Index closed 0.78% lower on Sunday amid market jitters on the updates regarding the fragile ceasefire agreement between the US and Iran.Reuters reported that the Strait of Hormuz closed again after reopening for one day. The area was blocked off again after Iran accused the US of violating its agreement due to the blockade of ports in the Middle Eastern nation.Further to this, the two sides noted that their talks to end the conflict were making progress. However, Iran's Deputy Foreign Minister Saeed Khatibzadeh noted that there was no exact date for its next round of in-person discussions."We are now focusing on finalising ⁠the framework of understanding between two sides. We don't want to enter into any negotiation or meeting which is doomed to fail and which can be a pretext for another round of escalation," Khatibzadeh said. "Until we agree the framework, we cannot set the date... There was significant progress made actually. But then the maximalist approach by the other side, trying to make Iran an exception from international law prevented us to reach an agreement."Back at home and on the corporate front, the board of Maharah Human Resources (SASE:1831) proposed to distribute a 0.13 Saudi riyal-per-share interim cash dividend for the second half of 2025, as well as increase its capital to 600 million riyals through bonus share issues. Shares of the human resources and outsourcing company closed 0.16% higher.Looking ahead to the week, the local economic calendar will see the release of the real estate price index for the first quarter and the February short-term business indicators statistics figures on Monday, as well as the February import and export data on Thursday.

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Oil & Energy

Weekly Crude Prices Decline as Iran Reopens Strait of Hormuz, Easing Risk Premium

Crude prices tumbled after Iran reopened the Strait of Hormuz, bolstering optimism that the US-Iran conflict will de-escalate and ease disruptions to global energy markets.West Texas Intermediate closed Friday at $85.57/bbl, down from $95.63/bbl the previous week, while Brent futures settled at $91.78/bbl, down from $94.36/bbl a week earlier.WTI futures plunged 13.2% over the week, while Brent prices declined 3.4%.The retreat follows the announcement by the US and Iran that the Strait of Hormuz would be open for the duration of a 10-day ceasefire between Israel and Hezbollah in Lebanon.On Friday, Iranian Foreign Minister Abbas Araghchi declared the Strait of Hormuz open to commercial shipping during the ceasefire period, easing concerns over potential disruptions to global oil flows."In line with the ceasefire in Lebanon, the passage for all commercial vessels through Strait of Hormuz is declared completely open for the remaining period of ceasefire, on the coordinated route as already announced by Ports and Maritime Organisation of the Islamic Rep. of Iran," Araghchi posted on X.Subsequently, US President Donald Trump posted on Truth Social on Friday that Iran had declared the Strait of Hormuz "fully open and ready for full passage," adding that the US blockade of Iranian ports is still in effect.Analysts, however, have cautioned against viewing this as a lasting de-escalation, citing the fragility of the ceasefire."The opening of Hormuz was made possible by a ceasefire between Israel and Lebanon. However, this can be only described as a temporary and tenuous agreement," said Viktor Shvets, head of Global Desk Strategy at Macquarie Capital.Five empty tankers have reportedly arrived at Iranian ports in the Arabian Gulf in recent days and begun loading crude oil, while Kpler said on Friday that early vessel movements, including those linked to Adnoc LNG operations near Das Island, pointed to a cautious return of activity."In the near term, it is more likely to improve logistics than create new supply," Claire Jungman, a Vortexa analyst, toldon Friday.She added that many barrels were delayed or queued rather than removed from the market, so reopening should help crude, liquefied petroleum gas, and liquefied natural gas cargoes resume movement.In a Friday note, Rystad Energy strategists said tanker network normalization could take 6-8 weeks, with insurers and shipowners needing 2-5 weeks to resume operations and upstream output recovering in another 2-6 weeks, largely occurring simultaneously.Commerzbank analysts said that while the war premium eased on Friday, the long-term outlook remains bullish as the world grapples with the loss of Middle Eastern infrastructure.The International Energy Agency confirmed a massive "Asian supply gap," reporting that zero new tankers were loaded in the Persian Gulf during the entire month of March.Meanwhile, North Sea crude prices declined by about $7 per barrel, while Brent plunged 13% to about $86/bbl after the update on the Strait of Hormuz reopening, according to a Bloomberg analysis on Friday.Key North Sea grades and US WTI Midland also declined $5-$7/bbl in a Platts pricing window run by S&P Global, reflecting a sharp shift in sentiment following the announcement, the Bloomberg analysis said.WTI Midland's premium over Dated Brent narrowed to $10.40/bbl, its lowest level this month and more than 50% below its April 14 peak, the analysis added.Brent prices were in backwardation relative to prompt physical North Sea barrels earlier this month. The new developments, however, reflect a drop in the prompt risk premium and physical differentials."Physical oil prices-prompt barrels rather than June futures-have fallen sharply from $144 on April 7 to around $116 today," J.P. Morgan analysts said.Meanwhile, International Energy Agency Chief Fatih Birol reportedly said that it will take two years to recover the energy output lost in the Middle East conflict.On the supply front, US crude stockpiles fell by 900,000 barrels to 463.8 mmbbls in the week ended April 10, the Energy Information Administration said in its weekly report on Wednesday.Crude inventories are now about 1% above the five-year average for this time of year, the EIA said.The US oil rig count dropped by one from 411 the previous week to 410 in the week ending April 17, according to data from Baker Hughes (BKR) released Friday. That compares with 473 oil rigs in operation a year earlier.The consolidated North American oil and gas rig count, a key early indicator of future production levels, dropped by seven to 673 from 680 the previous week.Money managers in the WTI crude futures and options markets maintained their net long positions in the week ended April 14, according to the Commodity Futures Trading Commission's latest Commitments of Traders report released Friday.The data showed that money managers reported 226,150 long positions, up 3,059 from April 7, while short positions were down 3,347 to 81,907.

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Oil & Energy

US Natural Gas Extends Weekly Losses on Bearish Fundamentals Amid US-Iran Diplomacy Signals

US natural gas futures posted another weekly decline amid swelling inventories, driven by relatively strong production and weak shoulder-season demand.The front-month contract price fell over the week to $2.68 per million British thermal units, from $2.72/MMBtu on April 10."Natural gas futures traded in an unusually tight range this week, with limited volatility despite a near-term backdrop that remains broadly bearish," Pinebrook Energy Advisors said in a daily note.The week that started with a reported US blockade of the Strait of Hormuz ended Friday with statements from US President Donald Trump and Iranian officials indicating the waterway would remain open. Further talks are reportedly scheduled for the weekend.The update triggered a sharp selloff in oil, prompting immediate financial outflows from energy-linked funds that include US natural gas contracts, according to a Bloomberg analysis. The move came even as the near-term supply-demand outlook for US gas remains largely unchanged.President Donald Trump posted on Truth Social that Iran had declared the Strait of Hormuz "fully open and ready for full passage."For the week ended April 15, the May 2026 Nymex contract was down $0.11 at $2.61/MMBtu, compared with $2.72/MMBtu the prior week, the Energy Information Administration's Weekly Gas Storage Supplement said.Natural gas spot prices fell by $0.05 to $2.75/MMBtu during the week ended April 15, according to the EIA, from $2.80/MMBtu a week earlier. This decline was largely attributed to a 31% drop in demand from the residential and commercial sectors, to 6.4 billion cubic feet per day.Spot prices varied across most regional hubs, from a $4.38/MMBtu decline at the Waha Hub to a $0.23/MMBtu increase at Algonquin Citygate.Prices across western hubs were relatively unchanged during the week, with most trading around $1/MMBtu. Northwest Sumas and the SoCal Border regions were below this mark, largely due to flat demand, as temperatures averaged 56.9 degrees Fahrenheit.The EIA reported a net injection of 59 Bcf into storage for the week ended April 10, up from a net injection of 50 Bcf the previous week, bringing total gas inventories to 1,970 Bcf.During the same week last year, the EIA reported a net injection of 22 Bcf, while the five-year average for this period was an injection of 38 Bcf. This week's figures were also above the 55 Bcf forecast, according to data compiled by Investing.com.Total gas inventories at 1,970 Bcf are now 126 Bcf, or 7%, above the corresponding period a year ago, and 108 Bcf, or 6%, higher than the five-year average for this period.Working gas in storage rose across all regions for the week ended April 10, with South Central seeing the biggest inflow at 32 Bcf, taking its total inventories to 839 Bcf. The Mountain and Pacific regions saw injections of 2 Bcf and 6 Bcf, respectively, the EIA reported.According to Pinebrook Energy Advisors, storage injections should continue growing at a healthy rate "through at least the end of April," amid tepid weather-related demand across most parts of the country.Weather forecasts had been bearish for most of this month, but conditions may shift, with large swathes of the Central US expected to see below-normal temperatures from April 24 to April 30, according to the National Weather Service.A total of 35 liquefied natural gas-carrying vessels left US ports during the week, down from 37 vessels the previous week. The total capacity of these vessels stood at 133 Bcf, down 7 Bcf from the prior week.Meanwhile, the US gas rig count decreased by two, from 127 the previous week to 125 in the week ending April 17, according to data from Baker Hughes released Friday. That compares with 106 gas rigs in operation a year earlier.The consolidated North American oil and gas rig count, a key early indicator of future production levels, dropped by seven to 673 from 680 the previous week.In international markets, European TTF gas prices averaged $15.23/MMBtu for the week ended April 15, $1.65/MMBtu lower than the previous week. The Japan-Korea Marker averaged $19.38/MMBtu, about $0.47/MMBtu lower than the prior week.

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