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Think tank: High oil prices will not save Russian growth
A think tank near the government stated on Monday that high?global oil?prices will not boost Russian economic growth in this year, as new sanctions from the West and drone attacks by Ukraine weigh on crude output and exports. TsMAKP, an influential think tank, has lowered its forecast of gross domestic product growth. The pressures have led to lower than expected outputs for Russia's primary export commodity by 2026. Many analysts had predicted that Russia would benefit from the increase in oil prices after the U.S., Israel and Iran attacks and the blockade of the Strait of Hormuz. The forecast for Russian oil exports and petroleum products in 2026-2029 was revised to the?downward. In this year's exports, Russia will likely be down on 2025, TsMAKP analysts stated in a report, without divulging the actual numbers due to confidentiality. In updating the external conditions of the baseline scenario for?Russia's Socio-Economic Development, the main considerations were the risks of decreased production and, therefore, exports from Russia of hydrocarbons due to new attacks against port infrastructure and oil refining. Only one month earlier, they had cut their GDP growth predictions for this year from 0.9% to 1.3% to 0.5% and 0.7%. Officially, the government predicts growth at 1.3%. However, officials have stated that this number is optimistic and will be revised. Later this month, new government forecasts will be released. The Russian economy shrank by 0.3% during the first quarter of this year, marking its first quarterly decline since early 2023. Last month, President Vladimir Putin asked his top officials to come up new ideas to boost the economy. According to a report published last month, Russia had to cut oil production in April due to drone attacks by Ukraine on ports and refineries as well as the halting of crude oil supplies via the only remaining Russian pipeline into Europe. Last week, Finance Minister Anton Siluanov announced that the state budget'received windfall oil revenue of 200 billion roubles thanks to higher oil price. He claimed that the windfall oil revenues made up for the shortfall of the previous two month. (Reporting and writing by Darya Kosunskaya, Editing by Andrew Heavens).
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Spirit Airlines asks for approval to pay retention fees as it closes its operations
Spirit Airlines, the bankrupt discount airline that ceased operations last Saturday, has asked for approval to pay retention bonuses to its remaining employees. It also said it had no other choice than to cease operations. Spirit seeks court approval for $10.7 million to be paid in retention bonuses, which is $76,000 per employee. The top three executives will also receive more money but the amount hasn't been revealed yet. "After fighting valiantly to reorganize for months, and having almost succeeded, (Spirit) is left with no alternative but to orderly wind down of operations," Chief Financial officer Fred Comer stated on Monday in a filing to the court. "There is no viable path to a restructuring, or continuing operations." Spirit announced that it would replace some of the payments made to senior executives as part of its annual incentive and cash incentives plans before bankruptcy. Spirit claims it lacks the money to hold an auction for its aircraft, engines, and other equipment and asks the court to allow for quick sales or abandonment and to let the lenders repossess. The carrier was in advanced discussions with the Trump Administration over a $500-million government bailout, which would have helped it exit bankruptcy. It also granted the government up 90% of Spirit's equity. These talks collapsed when some creditors objected. Since the U.S. and Israeli strikes on 'Iran, the Strait of Hormuz has been disrupted. This is the worst crisis for the air travel industry since the COVID-19 Pandemic. Spirit Airlines was already struggling to make a profit prior to the fuel shock, and now faces $100'million in additional fuel costs. Spirit stated that the material costs were too high for it to absorb. (Reporting and editing by Nick Zieminski, Bill Berkrot and Dietrich Knauth)
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Seoul: Fire and explosion strike South Korean vessel in Strait of Hormuz
The foreign ministry in Seoul reported that there was a fire on a ship operated by a South Korean?shipper HMM on Monday in the Strait of Hormuz. Yonhap News cited government officials as saying that the government was reviewing intelligence suggesting that HMM Namu may have been attacked. HMM reported that no casualties were reported, and the authorities are investigating the cause of the fire, which broke out in engine room on the cargo ship flying the flag of Panama. The company reported that 24 crew members were on board, including six Koreans. After Iran claimed to have prevented a U.S. Warship from entering the Gulf, the U.S. Military said that two U.S. Navy guided missile destroyers entered the Gulf in order to break the Iranian blockade. They also said that two U.S. Merchant?ships transited through the Strait of Hormuz. In a press release, the South Korean foreign ministry said that "our government will 'communicate' closely with relevant countries about this matter and take necessary steps to ensure...the safety of our ships?and crew inside the Strait of Hormuz." Seoul has confirmed that 26 vessels flying the South Korean flag are stranded in the area. (Reporting and editing by Hyunjoo Ji, Heejin Kim, Jack Kim, Andrew Cawthorne and Aiden Lewis)
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JetBlue and Frontier share prices rise as Spirit shares fall to make room for growth
Frontier Airlines shares and JetBlue Airways' rose after rival Spirit Airlines closed shop on Monday. The rise in the share price of these carriers is a sign that they are gaining market share and controlling prices. They also hope to absorb displaced passengers. JetBlue's shares rose 3% in early trading, while Frontier's gained 6%. Spirit, a bankrupt airline, ceased its operations on Saturday after failing to secure creditor support for the U.S. Government bailout plan. Spirit cancelled all flights and started a planned wind-down. This ended a 34-year-old run based on a model with no frills that had lost its appeal as more travelers chose comfort after the pandemic. Its exit would allow rivals to gain market shares while also easing the price wars which have squeezed margins across the U.S. aviation industry, especially in markets with a high leisure component such as Florida. Cirium, an aviation analytics firm, reported that Spirit had 4119 domestic flights scheduled from May 1 to May 15 and 809 638 seats. Frontier and JetBlue both pursued Spirit at one time, but Frontier was the first to do so in early 2022 with a merger of cash-and stock. JetBlue outbid Frontier later in a bid war that resulted in a $3.8 Billion agreement. However, the tie-up was blocked in January 2024 by a federal court on antitrust grounds. FRONTIER AND JETBLUE MOVE TO THE BENEFIT Frontier, Spirit’s main competitor in the ultra-low cost segment, was already making gains in Spirit’s Florida-based airline’s stronghold markets, as Spirit reduced capacity during its bankruptcy proceeding, picking up price sensitive passengers. JetBlue is also gaining on the overlapping routes, and with travelers who are upgrading from basic flying. It aims to make Fort Lauderdale its third major hub following New York John F. Kennedy Airport (JFK) and Boston Logan Airport. In a?note, TD Cowen's Tom?Fitzgerald said that he thought the Blue Sky partnership of?United with JetBlue was the best positioned for capturing the revenue (of Spirit) over time. Fitzgerald said that while Frontier Airlines and Spirit have the closest overlap and a similar business model we think the Blue Sky loyalty program is more likely to offer a better value proposition in places like Fort Lauderdale, Orlando and Newark, among other markets. JetBlue announced plans to expand service at Spirit's biggest hub, Fort Lauderdale Hollywood International Airport, in Florida. Spirit also plans to interview pilots and flight attendants who are interested in open positions. The airline expects to have nearly 130 daily flights departing from Fort Lauderdale in summer. This will be the largest number of daily flights in the history of the airline.
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Sonatrach reduces prices from 2% to 18%. Saudi Aramco keeps LPG OSPs at the same level for May.
Saudi Arabian state oil producer Saudi Aramco has held its official selling prices for liquefied petroleum gas in May, while Algerian Sonatrach cut it by up to 18%, due to a higher global supply. Saudi Aramco’s?OSPs for May were at $750 per metric ton of propane Butane is priced at $800 a ton . Propane and butane, two types of LPG, have?different boiling point. LPG is used primarily as fuel for vehicles, for heating and for other petrochemicals. Sonatrach has reduced its?May OP for propane from $700 to $150 per ton And?for Butane by $20 per ton?to $880 . The OSPs of Saudi 'Aramco are used to reference 'contracts for the supply of LPG from the Middle East into Asia-Pacific. Sonatrach's OSPs are benchmarks for the Mediterranean and Black Sea region including Turkey. Reporting by Mark Potter Mark Potter (Editing by Mark Potter).
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Bessent calls on China to intensify diplomatic efforts in Iran ahead of the Trump-Xi Summit
U.S. Treasury?Secretary Scott Bessent urged China on Monday to step?up diplomatic efforts to convince Iran to open up the Strait?of Hormuz for international shipping. He added?that this subject will?be?discussed?when Donald Trump meets Chinese President Xi Jinping in Beijing next week. Bessent stated during a Fox News Channel live interview that "China should step up and do some diplomacy to get the Iranians open the Strait." Bessent stated that China bought 90% of Iran's electricity, "so?they?are financing the largest state-sponsor of terrorism." He stated that he was encouraging China to "join us" in the international operation to open up the strait. However, he did specify what Beijing should do. He said that China and Russia must stop blocking initiatives being moved through the United Nations. For example, a resolution encouraging measures to protect commercial shipping along the Strait of Hormuz. Bessent stated that Trump and Xi had 'discussed the Iran situation, and will exchange their views in person on this during their May 14-15 Beijing summit. He stressed that both will work to maintain the stability of the U.S. and China relationship established by the trade truce they reached in Busan last October. He said, "We have had great stability within the relationship and that is due to both leaders' great respect for one another." Bessent said that through its blockade of Iranian shipping, the United States is in full control of the Strait of Hormuz and that a new U.S. Navy initiative to guide shipping along the strategic waterway would bring down oil prices. He said that high fuel prices are a temporary aberration and will be over in a few weeks or months. Bessent added that oil prices will fall quickly. David Lawder reported by Susan Heavey, David Lawder wrote by Daphne Psaledakis and Nick Zieminski edited by Hugh Lawson and Nick Zieminski.
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Source: Kazakhstan's oil-and-gas condensate production up 16% from March to April
A source familiar with these data reported that Kazakhstan, which is responsible for more than 2% of the world's oil production, increased oil and gas condensate output by 16% from March to April as major fields ramped up their output. Source: Total production increased to 2,17 million barrels per days in April, from 1,87 million bpd in march. Sources said that the increase was primarily due to the increased output at Tengiz - the 'largest oilfield in the country. Production there jumped by 39%, reaching 973,000 barrels per day. The 'energy ministry and operators in the major fields have not responded to our requests for comments. Tengiz, a Kazakh oil field located near the Caspian Sea, has recovered after a power outage that occurred in January. Tengizchevroil operates the field, which is a joint venture owned by Chevron. Exxon Mobil holds 25%, KazMunayGaz owns 20%, and Russia's Lukoil has 5%. Production at Karachaganak increased by?6% in April, to 256,600 bpd. Source: Excluding the gas?condensate crude oil production rose to 1.93 millions bpd from 1.64 million in March. This is far above Kazakhstan's OPEC+ quota for April of 1.579 millions bpd. Reporting by Mark Potter Mark Potter (Editing by Mark Potter).
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After the crisis, India's Petronet is expecting to receive a full supply of Qatar LNG.
A. K. Singh, the chief executive of India's largest?gas importer Petronet LNG, said that he expects to recieve his full contracted amount from Qatar once the?political situation? in?the Middle East stabilizes. Qatar, India’s largest LNG provider, has signed a contract with Petronet to supply 9-10 cargoes of LNG per month, or 7.5 million tons. In March, however, the?supplies ceased following the?Closure of the Strait of Hormuz. Iran also struck two of Qatar’s 14 LNG trains, forcing it to declare force majeure. Qatar has said that repairs will prevent the production of 12.8 million tonnes per year of LNG from Qatar for three to five more years. Singh stated that Petronet did not receive cargo from trains damaged by attacks. Singh said at a press briefing that he hoped and expected his supplies would not be cut. He added that Qatar had notified the company about force majeure in May deliveries. Petronet is building three new LNG tanks, two in a new import terminal in eastern India and another at the Kochi terminal to the south. Singh also said that they are scouting land to build four more tanks near their Dahej terminal which processes 22.5 million tons per year in western Gujarat.
S&P 500 and Dow fall as tensions between the US and Iran unnerve investors
S&P 500, the blue-chip Dow and the benchmark S&P 500 both fell on Monday. Investors were weighing the heightened concern over the Middle East conflict with the optimism generated by?last weeks earnings.
Reports contradicting each other about a U.S. In a volatile start to the week, market sentiment was dampened by conflicting reports about a?U.S.
Tehran claimed that it forced a U.S. Warship to return after it tried to enter the Strait of Hormuz. The semi-official Fars News Agency in Iran reported that two missiles hit the warship. However, the United States has denied this report.
Investors paused after a good week of earnings to assess the aggressive rhetoric from Washington and Tehran, and the potential for a new escalation.
Mark Malek is chief investment officer of Siebert Financial. He said, "I do not believe that the markets are properly pricing in the long-term risk that will come."
There are going to be more shoe drops. You'll see it in future profits," he said. He was referring to the increased risk of higher oil prices.
Oil prices remain high as the conflict continues to rage. Brent crude futures are now trading at over $110 per barrel, up 2.2% from Monday.
The Dow Jones Industrial Average dropped 230.93 or 0.47% to 49,268.34. The S&P 500 fell 6.48 or 0.09% to?7.223.64. And the Nasdaq Composite rose 26.87 or 0.11% to 25,141.31.
S&P 500's energy sector led the losses, falling 0.7%.
The CBOE Volatility Index (also known as Wall Street’s “fear gauge”) was up 0.57 at 17.56.
History has shown that May marks the beginning of a six-month period when stocks are weaker. According to Fidelity data, from 1945 to April 2026 the S&P 500 gained on average about 2% between May and October. This compares to an average gain of 7% from November through April.
Adam Turnquist is chief technical strategist for LPL Financial. He said that seasonal patterns are useful in the past, but not always reliable indicators of what's to come.
Oil prices falling and tensions in the Middle East easing could continue to support equities. This is especially true if earnings are resilient.
Berkshire Hathaway announced on Saturday that it had been a net seller of stocks for 14 consecutive quarters. Conglomerate is often seen as a bellwether for the U.S. Economy. Its insight into market conditions and valuations are closely monitored.
GameStop shares fell 2.4%, while eBay's rose 5.5%. The video game retailer announced a plan to purchase eBay for $56 billion.
Amazon.com announced on Monday that it would be rolling out "Amazon Supply Chain Services" to allow other businesses access to its logistics network.
Norwegian Cruise Lines' shares fell 7.7% after it lowered its forecast for the year due to higher fuel prices.
On the NYSE, declining issues outnumbered advancing ones by a ratio of 1.94 to 1 and by a ratio of 1.1 to 1 on the Nasdaq.
The S&P 500 recorded 19 new 52-week lows and 13 highs, while Nasdaq Composite registered 74 new highs with 31 new lows. (Reporting and editing by Arun K. Koyyur, Pooja D. Desai and Utkarsh H. Hathi from Bengaluru)
(source: Reuters)