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Zero Rss
3 months 1 week ago
OPEC +/-

By Bas van Geffen, Senior Macro Strategist at Rabobank

Brent futures topped $115/barrel, after news broke that US President Trump rejected Iran’s proposal to reopen the Strait of Hormuz. According to CNN’s sources, Iran is expected to submit a revised proposal in the next few days. However, it is unclear why Trump would accept this new version, unless Iran is suddenly willing to make concessions on its nuclear program.

Meanwhile, Reuters reports that US intelligence agencies are studying how Iran would respond if President Trump simply declared victory – suggesting that pressure on the president to end the war quickly is building. However, the White House states that they will “not be rushed into a bad deal.” Indeed, as the Wall Street Journal reports, the President prefers “decisive victories” and told his aides to prepare for an “extended blockade.” Military options remain on the table, but Reuters’ sources note that the cost of a full-scale war is now higher than it was at the start of the ceasefire. Iran has used the time to dig out materiel that was buried in the US bombings.

In short, negotiations between the two sides remain as stuck as the ships trapped in the Persian Gulf. And odds of a military campaign that quickly breaks the stalemate appear to have lessened. So, with no end in sight for the closure of Hormuz, futures prices are closing in on physical prices.

But news that the United Arab Emirates will withdraw from OPEC as of 1 May stemmed the advance of futures prices. The Ministry of Energy says the government decided to OPECxit, as the country wants to grow its output “based on national interest” and its commitment to “meet the market’s pressing needs.” But, as our energy strategists note, this does not change anything about the near-term supply-demand balance. Only after the Iran war ends, and the Strait of Hormuz reopens can we discuss the UAE ramping up oil production.

But the UAE’s departure could have broader ramifications for both OPEC and the region. If other countries follow the example set by the Emirates, it erodes the OPEC’s cartel.

The balance of powers in the region already seems to be shifting. The announcement followed days after the UAE negotiated a dollar swap line with the US, and after Israel sent an Iron Dome system and personnel to operate the air defences to the country. And it emphasises the growing rift between the UAE and Saudi Arabia, as the UAE moves more clearly into the US camp – which includes Israel.

As gradually as financial markets seem to be pricing in the impact of the war in Iran, so quickly are consumers taking it into account. Inflation expectations have risen rapidly in the latest round of the ECB’s Consumer Expectations Survey. The sharp increase in 1-year expectations is not too surprising, but notably consumers’ expectations of inflation 3 years ahead rose equally quickly – from 2.5% to 3.0%.

That puts medium-term inflation expectations back around the highs of the Russian gas crisis, even though the relative price shock has been much more muted so far. It suggests that memories of the previous energy crisis are making consumers more wary of new price shocks. We would not consider this a de-anchoring of inflation expectations yet, but it does underscore the risk that second-round effects could take hold via wage or price setting more quickly.

This adds some pressure on the ECB to act this week already. Our base case remains a hold, but the survey suggests that the probability of a hike may be a bit higher than the 10% implied by money markets. In any case, policymakers will not be very comfortable with their decision.

Adding to that unease, Bruegel has calculated that about 80% of EU governments’ energy support measures are untargeted. The largest commitments are directed towards lowering fuel excise duties or VAT. As Bruegel notes, that is contrary to the recommendations of the European Commission and the European Central Bank. At €10.5 billion, the total amount committed to energy support measures is still small, but untargeted measures increase the risk that the energy price shock could become a broader and more persistent inflationary pressure

Tyler Durden Wed, 04/29/2026 - 11:00
Tyler Durden

Bloom Energy Erupts On Beat, Guidance Upgrade As On-Site Data Center Power Demand Soars

Zero Rss
3 months 1 week ago
Bloom Energy Erupts On Beat, Guidance Upgrade As On-Site Data Center Power Demand Soars

Clean-power company Bloom Energy surged early in the U.S. cash session after reporting earnings Tuesday after the close, raising its full-year revenue and margin guidance on rising demand from data centers and other commercial customers. 

The maker of solid oxide fuel cell systems, branded as Bloom Energy Servers, that generate electricity on-site for customers, posted a profit of $70.7 million, or 23 cents a share, compared with a loss of $23.8 million, or 10 cents a share, from the same quarter one year ago. 

On an adjusted basis, earnings came in at 44 cents per share in the first quarter, beating analysts' estimates tracked by Bloomberg of 8.4 cents per share.

Here's a snapshot of first-quarter earnings (courtesy of Bloomberg): 

Adjusted EPS 44c, estimate 8.4c

EPS 23c 

Revenue $751.1 million, estimate $535.3 million

  • Product revenue $653.3 million, estimate $397.9 million
  • Installation sales $25.9 million, estimate $49.2 million
  • Service revenue $61.9 million, estimate $71.7 million
  • Electricity revenue $9.90 million, estimate $14.1 million

Adjusted Ebitda $143.0 million, estimate $52.9 million

Adjusted net income $138.1 million, estimate $26.7 million

"We at Bloom are ushering in the era of digital power for the digital age. Bloom is rapidly becoming the standard and "go-to choice" for on-site power," Bloom CEO KR Sridhar wrote in an earnings press release.

For the full year forecast, here's what Bloom expects:

Sees revenue $3.4 billion to $3.8 billion, saw $3.1 billion to $3.3 billion, estimate $3.25 billion (Bloomberg Consensus)

Sees adj. gross margin about 34%, saw about 32%, estimate 31.9%v

Shares of Bloom jumped as much as 20% in the cash session to a new record high.

Wall Street analysts were broadly positive (commentary courtesy of Bloomberg):

Citi (neutral, PT raised to $281 from $229)

  • Analyst Vikram Bagri sees the first quarter revenue beat as strong, driven by capacity expansions and product sales

  • Sees second-quarter revenue rising on continued strong momentum, cost discipline and improving gross margins and operating leverage

  • "International opportunities continue to progress, albeit at a measured pace amid a challenging geopolitical and energy backdrop, with the majority of AI‑driven power demand currently concentrated in the US"

Morgan Stanley (overweight, PT raised to $310 from $184)

  • Analyst David Arcaro sees Bloom's outlook as attractive with revenue and profit set to increase and margins continuing to expand

  • "We believe the confirmation of the recent Oracle deal likely contributed to the increase, with at least 1.2 GW being delivered over 2026 and 2027, and the company also suggested broadbased strength across data center and C&I end markets"

  • Sees manufacturing efficiencies improving gross margins

Jefferies (hold, PT raised to $207 from $187)

  • Analyst Dushyant Ailani sees the guidance raise as positive with gross margins improving on cost optimization and productivity

  • "BE is increasingly moving beyond the 'bridge solution' narrative, supported by its standalone microgrid deployment with Oracle and similar discussions with other customers"

  • Sees Bloom reaching at least 2 GW of capacity by year-end 2026 as additions continue

Bloom peers, including Plug Power, FuelCell Energy, and Ballard Power Systems, also moved higher.

Tyler Durden Wed, 04/29/2026 - 10:45
Tyler Durden

Fed Chair Pick Warsh Approved By Key Senate Committee Along Party Lines

Zero Rss
3 months 1 week ago
Fed Chair Pick Warsh Approved By Key Senate Committee Along Party Lines

The drama over Kevin Warsh's nomination as Trump's pick for next Fed chair appears to be over.

Moments ago, Warsh won the backing of the Senate Banking Committee Wednesday in a 13-11 party-line vote, putting him on track to be confirmed by the full Senate before Jerome Powell’s term ends May 15, Bloomberg reproted. 

Warsh’s nomination had been held up by Republican Senator Thom Tillis until the Department of Justice agreed last week to drop (for now) a criminal probe into cost overruns in a renovation of the Fed’s Washington headquarters. Tillis, who saw the probe as “bogus” and a threat to the Fed’s independence on monetary policy, said in an interview on NBC’s “Meet the Press” that he received assurances the department wouldn’t reopen the case unless the Fed’s inspector general, who is also reviewing the project, sends a criminal referral.

As expected, Democrats weren’t won over: Senator Elizabeth Warren warned that Trump is still intent on controlling the Fed; Democrats have also demanded an end to a legal pursuit of Fed Governor Lisa Cook.

“The stink of stagflation is in the air,” Warren said. She said confirmation of Warsh would help Trump dominate the Fed’s monetary policy. “Trump has not been subtle about his takeover,” she said.

The vote makes real the prospect of a Warsh-led Fed that promises the biggest shake up of the US central bank in years. Having raised the prospect of “regime change” as part of his bid to win Trump’s nomination, Warsh has promised to shrink the Fed’s $6.7 trillion balance sheet, establish a new framework for managing inflation and change how the central bank communicates with the public. He has, however, offered few details on how he might pursue each of these goals.

Warsh is almost certain to face heavy pressure from Trump over monetary policy. In a CNBC interview on April 21, the president said he’d be disappointed if Warsh didn’t cut rates as soon as he took office.

Meanwhile, Warsh has vowed to protect the Fed’s independence. In his hearing last week Warsh blamed the Fed for allowing inflation to surge following the Covid-19 pandemic. While he said high prices remain a problem for Americans, he also floated the idea of a new framework for dealing with persistent inflation, though didn’t offer specifics. He also steered clear of committing to a near-term path for interest rates and suggested Fed officials have made a habit of providing financial markets with too much guidance on where policy is headed.

The combination of Warsh’s calls for a smaller balance sheet, new ways to think about inflation and communication changes put Warsh in the spotlight to explain how he’ll defend the Fed’s independence, said EY-Parthenon Chief Economist Gregory Daco.

“Taken together, this points to a more centralized, less transparent and potentially more politically-exposed policy framework,” he said.

Earlier, Warsh and his wife, Jane Lauder, reported assets worth at least $192 million in financial disclosures filed as part of his nomination.  But his total net worth is likely much larger and makes him one of the wealthiest Fed officials in the central bank’s history. Bloomberg has estimated his wife’s net worth at $2.5 billion, many of which are market-dependent. Democratic lawmakers called for more scrutiny of Warsh’s assets, while Warsh has promised to quickly divest from certain funds for which he hasn’t disclosed the underlying assets, citing confidentiality agreements.

Tyler Durden Wed, 04/29/2026 - 10:23
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Max Pressure: U.S. Prepares For Extended Hormuz Blockade As Treasury Warns Sanction Risks Linked To China's "Teapot" Refineries

Zero Rss
3 months 1 week ago
Max Pressure: U.S. Prepares For Extended Hormuz Blockade As Treasury Warns Sanction Risks Linked To China's "Teapot" Refineries

The U.S. is intensifying pressure on Iran and China across two fronts.

First, on the military side, The Wall Street Journal reported that President Trump told top aides to prepare for an extended U.S. naval blockade of the Strait of Hormuz, a move that would strangle Tehran's oil revenue.

Second, on the economic side, the Treasury Department's Office of Foreign Assets Control is warning financial institutions about sanctions exposure related to Chinese independent "teapot" refineries, particularly in Shandong Province, due to their continued purchases and refining of Iranian crude.

Taken together, the message from President Trump to Secretary of the Treasury Scott Bessent is very clear: Washington is squeezing Iran's oil revenue at both ends of the supply chain, through a continued blockade of the Hormuz chokepoint that enables exports and the Chinese refining network.

"China purchases approximately 90 percent of Iran's oil exports, with teapot refineries accounting for the majority of these imports. This revenue ultimately benefits the Iranian regime, its weapons programs, and its military," Treasury explained in a press release, adding, "Some Chinese teapot refineries have used the U.S. financial system to conduct dollar-denominated transactions and procure U.S. goods."

What OFAC is doing is urging banks to tighten controls, conduct enhanced due diligence on transactions involving China-based refineries, and communicate sanctions expectations to correspondent banks.

Treasury also imposed sanctions on 35 entities and individuals for their roles in Iran's shadow banking sector.

The reason the Treasury singled out Shandong Province is that the area in China is a core hub for China's independent refineries.

Efforts to end the US-Iran war, now entering the third month, have morphed from an air campaign against Tehran to an economic war with hopes that the Trump administration can economically squeeze Tehran into a favorable peace deal that includes winding down its nuclear program.

"Iran's shadow banking system serves as a critical financial lifeline for its armed forces, enabling activities that disrupt global trade and fuel violence across the Middle East," Bessent said in a statement, quoted by Reuters.

"Illicit funds funneled through this network support the regime's ongoing terrorist operations, posing a direct threat to U.S. personnel, regional allies, and the global economy," Bessent said, adding any institution that facilitated or engaged with these networks was at risk of "severe consequences."

OFAC has already imposed about 1,000 sanctions on Iran-related individuals, ships, and aircraft as part of a campaign to exert maximum economic pressure on Iran's shadow banking.

Brett Erickson, managing principal at Obsidian Risk Advisors, told Reuters that the Trump administration should go after Chinese banks that have supported Tehran.

"Washington keeps talking about waging a maximum pressure campaign, but it is still avoiding the one move that would actually matter," Erickson said. "If you are not willing to target the Chinese banks propping up the regime in Tehran, you are not going for the jugular, you are running a charade."

The U.S. economic pressure campaign on Tehran, as well as China, comes as Trump travels to Beijing next month to meet with his Chinese counterpart, Xi Jinping.

Tyler Durden Wed, 04/29/2026 - 10:05
Tyler Durden

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