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RBC Capital Markets Raises Commodity Price Outlook for 2026-28

RBC Capital Markets has raised its commodity price outlook due to the potentially long-lasting impact of the conflict between the US and Iran.The analysts said the tightening of supply and demand fundamentals has prompted them to raise their 2026-2028 equilibrium price for Brent/WTI by $10 to $80/$75 and Henry Hub natural gas by $0.25 to $4.00 per million cubic feet."This move reflects ongoing collateral damage in the Gulf region and a rising call on barrels globally from an energy security standpoint," RBC's research note said.It added that share buy-back activities were likely to slow given the recent sharp rise in equities valuations, up by more than 50% in the calendar year so far.In terms of trading ideas, RBC highlighted ConocoPhillips (COP) and EOG Resources (EOG) among large players, California Resources (CRC), Permian Resources (PR) and Chord Energy Group (CHRD) among small to medium and Expand Energy Corp (EXE) in gas.RBC said it had raised its EPS-to-cash flow per share estimates by an average 45% to reflect its revised commodity price expectations with oil players in this basket generally up closer to 55%.In keeping with this, price targets have been raised 27% on average, the note said.

$CHRD$COP$CRC$EOG$EXE$PR

RBC Lifts Oil, Gas Forecasts Amid Enormous Middle East Supply Shock

Global oil and natural gas price forecasts have been sharply revised higher following the latest escalation in the Middle East, with RBC Capital Markets citing an "enormous oil supply shock" and no clear path to de-escalation.In a research report published on Wednesday, the bank said that it now sees Brent crude averaging $90.99 per barrel in 2026, up 51.3% from its prior estimates, with the West Texas Intermediate expected at $83.63 per barrel, a 49.3% upward revision.Similarly, RBC raised its natural gas outlook, with Henry Hub prices seen at $4.07 per Metric Million British Thermal Unit, up 7%. In contrast, European gas prices are expected to more than double, with the UK NBP forecasts at $16.51 per MMBtu.The report said that expectations of normalization in European gas prices had been "upended," as Asian buyers seek out alternative supplies, competing directly with buyers within the bloc.Globally, around one-fifth of LNG supply has been taken offline due to the Iran conflict. However, RBC noted that increased capacity additions and weaker Chinese demand could partially cushion the shock.The bank's analysts also moved their natural gas liquids forecast higher, attributing it to replacement demand for propane and butane, flows of which have been disrupted during the ongoing Strait of Hormuz crisis.

US Markets20d ago

Equities Mark Best Finish in At Least 4 Weeks Following US-Iran Truce

Equities on Wall Street rallied Wednesday, driving key indexes to their highest close in at least four weeks, as oil prices slid following a two-week ceasefire between the US and Iran.The Dow Jones Industrial Average increased 2.9% to 47,909.9, the highest close since March 5, while the Nasdaq Composite jumped 2.8% to 22,635, its best finish since March 11.The S&P 500 advanced 2.5% to 6,782.8, marking the highest closing level since March 9.Barring energy's 3.7% decline, all sectors ended in the green, led by industrials' 3.8% advance.West Texas Intermediate crude oil was last down nearly 15% at $96.44 a barrel, while Brent futures tumbled about 12% to $96.40 -- though both benchmarks remained well above pre-conflict levels.US President Donald Trump, who had set an 8 pm ET, Tuesday, deadline for Tehran to fully reopen the Strait of Hormuz, agreed to suspend planned attacks on Iran for two weeks upon Pakistan's request. Tehran said it would allow "safe passage" through the key trading route, subject to coordination with Iranian authorities.However, reports about ceasefire violations signified the possible fragile nature of the pact.Iran's parliamentary speaker, Mohammad Bagher Ghalibaf, accused the US of violating the ceasefire agreement.The White House said Iran assured that ships are transiting the Strait of Hormuz, despite reports that Tehran had again closed the waterway because of Israel's attacks on Lebanon, CNN reported.Separately, Kuwait and the United Arab Emirates reportedly said they were targeted with Iranian drones and missiles."The headlines may calm down first, but the real reset depends on what happens in the days ahead," Charu Chanana, chief investment strategist at Saxo Bank, said in a report.US Treasury yields were down, with the 10-year rate falling 5 basis points at 4.3% and the two-year rate dropping 4.1 basis points at 3.79%.Minutes from the Federal Reserve's March meeting showed that participants emphasized the need for the central bank to be "nimble" in adjusting monetary policy amid heightened macro risks."The vast majority of participants judged that upside risks to inflation and downside risks to employment were elevated, and the majority of participants noted that these risks had increased with developments in the Middle East," the minutes showed.Most policymakers were concerned that a prolonged war could soften labor market conditions, possibly warranting policy easing, according to the minutes. However, persistent inflation amid higher oil prices could call for rate increases."The conflicting viewpoints point to a period of policy stability," Sal Guatieri, senior economist at BMO Capital Markets, said in a report. "The Fed is on hold until it has greater clarity on the direction of the Iran war and its effects on the economy and inflation."Airline and cruise operator stocks jumped, with Carnival (CCL) up 11%, among the top gainers on the S&P 500. United Airlines (UAL) surged 7.8%. Southwest Airlines (LUV) and American Airlines (AAL) were also up, along with Norwegian Cruise Line (NCLH) and Royal Caribbean Cruises (RCL).In company news, Meta Platforms (META) shares jumped 6.5% after the tech giant unveiled its Muse Spark artificial intelligence model.Delta Air Lines (DAL) logged better-than-expected first-quarter results amid robust corporate and leisure demand. The air carrier's shares rose 3.8%.Exxon Mobil (XOM) expects its global oil-equivalent output to take a hit in the first quarter due to production disruptions caused by the Middle East conflict. Shares of the US oil giant fell 4.7%, while smaller rival Chevron (CVX) slumped 4.3%, the steepest decline on the Dow.Gold was last up 1.4% at $4,750.70 per troy ounce, while silver gained 3.4% to $74.44 per ounce.

$^DJI$^IXIC$^SPX$AAL$CCL$CVX$DAL$LUV$META$NCLH$RCL$UAL$XOM

US Markets20d ago

Fed Should be 'Nimble' Amid War-Driven Macro Risks, March Meeting Minutes Show

The Federal Reserve should be "nimble" in adjusting monetary policy in light of heightened risks to inflation and employment driven by the Middle East conflict, minutes from the central bank's March 17-18 meeting showed Wednesday.At the meeting, the Federal Open Market Committee decided to keep its policy rate unchanged between 3.50% and 3.75% for a second straight time amid uncertainty around the US-Israel war with Iran. The FOMC's Summary of Economic Projections at the time continued to indicate potential policy easing this year."In light of the heightened degree of economic uncertainty, participants emphasized the importance of being nimble in adjusting the stance of policy in response to incoming data, the evolving outlook, and the balance of risks," the meeting minutes showed Wednesday. "Many participants judged that, in time, it would likely become appropriate to lower the target range for the federal funds rate if inflation were to decline in line with their expectations."A couple of policymakers pushed their expected timing of potential policy easing "further into the future," according to the document."The vast majority of participants judged that upside risks to inflation and downside risks to employment were elevated, and the majority of participants noted that these risks had increased with developments in the Middle East," the minutes showed.On Tuesday, the US and Iran agreed to a two-week ceasefire. The war, which began at the end of February, spread across the Middle East and curtailed shipments through the crucial Strait of Hormuz, driving up energy prices.West Texas Intermediate crude oil sank nearly 15% to $96.34 a barrel intraday, while Brent futures tumbled 12% to $96.55. Despite the declines, oil prices remained well above pre-war levels."Our baseline view is that as the (energy price) shock gradually fades, so too will inflation pressures," TD Economics Senior Economist Andrew Hencic said in a note Wednesday. "This may open the door for the Fed to normalize rates in the latter half of the year."Most policymakers were concerned that a prolonged war could soften labor market conditions, possibly warranting additional policy easing, the meeting minutes showed Wednesday.Earlier this month, official data showed that the economy added more jobs than expected in March, while the unemployment rate edged down to 4.3% from 4.4% sequentially."Many participants pointed to the risk of inflation remaining elevated for longer than expected amid a persistent increase in oil prices, which could call for rate increases to help bring inflation down to the committee's 2% objective and keep longer-term inflation expectations firmly anchored," according to the latest meeting minutes. "Participants anticipated that, under appropriate monetary policy, inflation would gradually move down toward the committee's 2% objective after the effect of increased tariffs and higher oil prices had faded."Markets widely expect the FOMC to keep interest rates unchanged later this month, according to the CME FedWatch tool.

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RBC Capital Markets Raises Commodity Price Outlook for 2026-28

RBC Lifts Oil, Gas Forecasts Amid Enormous Middle East Supply Shock

RBC Capital Markets Raises Commodity Price Outlook for 2026-28

RBC Lifts Oil, Gas Forecasts Amid Enormous Middle East Supply Shock

EMEA Oil Update: Prices Bounce as Middle East Truce Hopes Fade

Equities Mark Best Finish in At Least 4 Weeks Following US-Iran Truce

Wealth Brokers, Investment Banks Faced Uneven First-Quarter Activity, UBS Says

Fed Should be 'Nimble' Amid War-Driven Macro Risks, March Meeting Minutes Show

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Exxon Mobil Flags First-Quarter Output Hit Due to Middle East Conflict

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