​EBC Markets Briefing | Crude prices spurt; Intel saw fresh peak

Oil prices extended gains on Thursday after Trump has rejected an Iranian proposal to first open the Strait of Hormuz and lift the blockade, while postponing nuclear talks to a later stage.

Goldman Sachs estimates that exports through the waterway have fallen to just 4% of normal levels, but warns of emerging downside risks to demand, especially for jet fuel and petrochemical feedstocks.

The OPEC+ is likely to agree a small increase of around 188,000 bpd in oil output quotas on Sunday, sources told Reuters. The meeting follows the UAE's surprise departure from the cartel.

Saudi Arabia and the UAE together control a majority of the world's total spare capacity of more than 4 million bpd. Russia says UAE's exit from OPEC will increase global production, bring down oil prices in future.

US gasoline stocks fell by 6.1 million ⁠barrels in the week ended 24 April, the EIA said, compared with analysts' expectations for a 2.1 million-barrel draw. That marked the 11th straight week of draws.

The country became a net exporter of crude for the first time since WWII as Europe and Asia have increasingly become dependent on major producers outside the Middle East.

WTI crude was retesting the high around $106.6 hit in 7 April, but the rally could have run its course without real attacks. As such, a retreat towards $102 seems likely.

Asset recap

As of market close on 29 April, among EBC major products, Intel Corp shares led gains following a reports that Google is considering Intel's cutting-edge chip-packaging tech for an upcoming AI processor.

UK stocks plummeted, held back by falls for AstraZeneca and GSK. Pharma executives become increasingly outspoken about the risk to European patients losing out on new medicines as a result of US drug pricing policy.

Renewable energy stocks jumped on the upsurge in oil prices. The US clean power industry invested $79 billion in new projects during the year and contributed more than $150 billion to the economy.

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