Oil prices retreat from 4-year highs

Today’s headlines

What’s happening: Brent crude, the global benchmark for oil prices, edged lower this morning after recording sharp gains in the previous session.

What happened: Global oil prices surged past $114 per barrel on Monday after the US and Iran exchanged fire, testing the fragile ceasefire agreement.

Profit-taking after the surge and strength in the US dollar weighed on oil prices this morning.

Why it matters: The US and Iran exchanged fire at the Strait of Hormuz, raising concerns around the durability of the ceasefire that was declared around four weeks ago.

The latest attacks US President Donald Trump’s announcement of what he called “Project Freedom,” to help release commercial vessels stranded in the Strait of Hormuz.

In the crossfire on Monday, a few commercial vessels were hit. Meanwhile, the US claimed to have destroyed six small Iranian boats.

The UAE said its air defences intercepted missiles and drones launched by Iran, while confirming a fire at ⁠Fujairah Oil ​Industry Zone.

The ongoing Middle East conflict has triggered supply concerns and provided a sharp boost to energy prices. This in turn increases speculations of central banks keeping their benchmark interest rates higher for longer or even raise them.

Strength in the US dollar exerted pressure on crude oil prices, as a higher greenback makes commodities more expensive for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose by more than 0.1% to 98.51 this morning.

Spot price for WTI crude oil fell around 0.4% to $106.56 per barrel this morning, while Brent crude prices eased 0.4% to $118.52 per barrel.

In other commodities trading, heating oil fell 0.8% to $4.0418, natural gas dipped 1% to $2.839 and gasoline declined by 0.6% to $3.7153.

What to watch: Investors will continue monitoring the rising Middle East tensions and any agreement that is reached between the US and Iran.

Data on EIA crude oil stocks change (0630 UAE Time), EIA gasoline stocks change (0630 UAE Time) and EIA heating oil stocks change (0630 UAE Time) will be released on Wednesday. US crude inventories declined by 6.233 million barrels to 459.5 million barrels in the week ended April 24. Gasoline inventories fell 6.075 million barrels to 222.3 million, while distillate stockpiles, including diesel and heating oil, contracted by 4.494 million barrels to 103.6 million during the week.

The markets today

Pinterest in focus today following the release of quarterly results

Context: Shares of Pinterest rose sharply in after-hours trading on Monday after the company posted upbeat first-quarter results and issued a strong revenue forecast.

Details: Pinterest reported quarterly revenue of $1.01 billion, surpassing consensus estimates of $966.25 million. Adjusted earnings came in at 27 cents per share, topping Wall Street expectations of 23 cents per share.

Total revenue for the idea discovery platform company surged 18% year-over-year as global monthly active users (MAUs) rose 11% year-over-year to 631 million. Average revenue per user came in at $1.61 globally and $7.12 in the US and Canada during the quarter.

The latest results came a month after activist investor Elliott Management announced a strategic investment worth $1 billion in the company.

Pinterest has been increasing its investments in AI, while raising its focus on SMBs (small and medium businesses). These efforts are starting to ease pressure from the pullback by some big advertisers due to increased costs because of tariffs and ongoing geopolitical concerns.

Pinterest guided to second-quarter revenues of $1.13-$1.15 billion, higher than market estimates of $1.11 billion. The company projected adjusted EBITDA of $256-$276 million for the quarter.

How shares responded: Pinterest’s shares jumped 15.5% to $24.08 in extended trading hours following the release of quarterly earnings on Monday. The stock has lost around 37% over the past six months.

What to watch: Investors will continue monitoring demand from SMBs and the company’s ability to monetise its AI investments. Tariffs and other geopolitical issues will also remain in focus.

Other Markets: US trading indices closed lower on Monday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 1.13%, 0.41% and 0.21%, respectively.

The news shaping the markets

Russia and Ukraine declared competing ceasefires in their war, with Moscow announcing it between May 8-9 and Kyiv between May 5-6. The news sent the USD/RUB pair higher in forex trading this morning.

Thailand’s S&P Global manufacturing PMI declined to 52.7 in April from 54.1 in March. Manufacturing activity contracting to its lowest level since January lent support to the USD/THB forex pair.

Colombia’s Davivienda manufacturing PMI slipped to 50.8 in April from 51.4 in the previous month. Manufacturing activity remaining in the expansion zone sent the USD/COP pair lower in forex trading this morning.

Australia’s S&P Global composite PMI climbed to 50.4 in April, from an initial reading of 50.1, which lent support to the AUD/USD forex pair.

Mexico’s S&P Global manufacturing PMI fell to 47.7 in April from 48.9 in the previous month. The manufacturing index remaining in the contraction zone for the eighth month in a row lent support to the USD/MXN pair in forex trading this morning.

What else to watch today

Brazil’s IPC-Fipe inflation (1200 UAE Time), UK’s new car sales (1200 UAE Time), US building permits (1600 UAE Time), balance of trade (1630 UAE Time), Redbook index (1655 UAE Time), S&P Global composite PMI (1745 UAE Time), S&P Global services PMI (1745 UAE Time), ISM services PMI (1800 UAE Time), JOLTs job openings (1800 UAE Time), new home sales (1800 UAE Time), ISM services business activity (1800 UAE Time), JOLTs job quits (1800 UAE Time), RCM/TIPP economic optimism index (1810 UAE Time) and total household debt (1900 UAE Time) as well as Canada’s balance of trade (1630 UAE Time), S&P Global composite PMI (1730 UAE Time) and S&P Global services PMI (1730 UAE Time).