G-7 Ready to Tap Oil Reserves if Needed -- -3-

0735 GMT - Oil prices surge to their highest level since mid-2022 as some major Gulf producers started cutting production, while the Strait of Hormuz shipping route remains effectively closed. Brent crude climbs 15% to $106.21 a barrel after reaching $119.50, while WTI is up 12% to $92.33 a barrel, having hit $103.67 a barrel earlier in the session. "The combination of these production shut-ins and no signs of de-escalation in the war means the market is having to aggressively price in a prolonged supply disruption," analysts at ING say. "Even if flows through the Strait of Hormuz start to resume, it will take time for upstream production to ramp up." ([e-mail])

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China Aviation Oil's Jet-Fuel Trading Could Get Mideast Boost -- Market Talk

0644 GMT - China Aviation Oil (Singapore)'s jet-fuel trading could be bolstered by an effective suspension of shipping via the Strait of Hormuz, says OCBC Group Research's Ada Lim in a note. The boost could be offset by potentially lower jet-fuel volumes on weaker travel demand, the analyst notes. The Middle East conflict has caused jet-fuel prices to surge while casting uncertainty on civil aviation demand, she says. The jet-fuel trader said potentially softer business volumes haven't been significant drags on its financial performance, she notes. If the company uses its cash for accretive acquisitions or share buybacks, those could be rerating catalysts, she says. OCBC raises its rating on the stock to buy from hold and lifts its fair-value estimate to S$2.48 from S$1.60. Shares rise 0.55% to S$1.84. ([e-mail])

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Brent Crude Could Surge Toward $140/bbl in 'Acute' Energy Shock Scenario

0616 GMT - An "acute" energy shock scenario could send Brent crude oil toward $140/bbl and keep it elevated through mid-2026, OCBC Group Research's Sim Moh Siong says in a research report. "Our base case of oil sliding below USD70/bbl by mid-year is being undermined by tail risks reminiscent of the 2022 Russia-Ukraine energy shock," the commodity strategist says. Tanker flows through the Strait of Hormuz "have grounded to a halt as security risks surge, driving Brent above USD100/bbl and sending global energy markets scrambling for alternatives," the strategist says. Front-month Brent crude oil futures are 15.3% higher at $106.83/bbl. ([e-mail])

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Miners' Output Falls Short, But By Less Than Usual -- Market Talk

0548 GMT - Miners' output last year fell 1% short of corporate guidance, but the scale of the miss was better than the long term trend, says Citi analyst Ephrem Ravi. Over the past decade, mining output has missed guidance by an average 2.6%, he says. Last year's miss was primarily the result of soft output of base metals--particularly copper--by Glencore, Anglo American and Antofagasta, says Ravi. "The intention of this exercise is to provide a guide to investors as to the historical track record of production versus guidance," he says in a note. "We would not interpret this as miners being consistently too optimistic as they do not/should not incorporate any major 'disruption allowance' into their estimate--that is up to investors to do." ([e-mail]; @RhiannonHoyle)

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Drag on Oil Supply Could Remain Beyond Middle East Conflict's Duration

0355 GMT - The shock to global oil supply has the potential to remain beyond the Middle East conflict's duration, says Phillip Nova's Priyanka Sachdeva in a note. Oil prices topped $100 after Iranian infrastructure was hit over the weekend, threatening oil flows, the analyst notes. The effective halt at the Strait of Hormuz has slowed shipping activity in the Middle East, leaving Asian buyers vulnerable given their heavy reliance on the region's crude oil, she adds. Markets are beginning to price in the risk of lasting damage to energy infrastructure such as pipelines and production facilities. Investors should also stay wary as oil's sharp rise could trigger profit-taking in broader markets, she says. Front-month WTI futures jump 27% to $115.77/bbl, while Brent rises 25% to $116.15/bbl. ([e-mail])

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Iron Ore Gains Amid China Pledge to Support Steel Sector -- Market Talk

0229 GMT - Iron ore rises in Asian trade, with the most-traded iron-ore contract on the Dalian Commodity Exchange gaining 2.9% to 789.0 yuan a metric ton. This likely stems from China's commitment to support the steel sector and curb excess capacity, says Commonwealth Bank's Belinda Allen in a note. However, ANZ expects Chinese iron ore demand to weaken further in 2026 as steel consumption declines. Falling steel consumption is likely to be driven by a weaker property sector, the ANZ strategists say, partially offset by infrastructure and consumer sector initiatives. ([e-mail])

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Oil Rally Could Unwind Quicker Than LNG

0141 GMT - Oil-price gains could unwind quickly when the Strait of Hormuz eventually reopens, says Macquarie. Spot LNG may take longer to drop, as it will take time to restart suspended operations in Qatar, the bank says. Among Australian stocks, Macquarie names Santos as its top pick. It reiterates an outperform rating, although notes that "upside to our valuation is now becoming more limited." It keeps a neutral rating on Woodside, which it says its now trading well above long-term discounted cash flow. Santos is up 2.7% at A$7.66. Woodside is up 0.7% at A$30.97. ([e-mail]; @RhiannonHoyle)

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(END) Dow Jones Newswires

03-09-26 1218ET