By Tom Westbrook
SINGAPORE, April 27 (Reuters) – Oil climbed on Monday as stalled U.S.-Iran peace talks signal further disruption in Middle East energy exports, while chip stocks rose on renewed excitement about AI spending in a week crowded with central bank decisions and tech earnings reports.
Benchmark Brent crude futures rose more than 2% to touch a three-week high of $107.97 a barrel in Asia trade, stoking inflation worries and prompting traders to all but price out rate cuts in developed markets this year.
S&P 500 futures wobbled in the Asian session and were flat as markets in Taiwan, Tokyo and Seoul followed Wall Street to record highs, riding a fresh wave of AI optimism. [.KS][.T][.N]
Currencies wavered slightly, with the euro at $1.1725 and the yen at 159.26 to the dollar. Bond markets were calm ahead of central bank meetings in Japan, the U.S., Britain, Europe, Canada and some emerging markets.
While a ceasefire has frozen most fighting in the war triggered by U.S.-Israeli strikes on Iran two months ago, markets are focused on the shuttered Strait of Hormuz, crossed by barely any ships carrying cargoes of oil and gas.
The average LNG price for June delivery into northeast Asia was $16.70 per million British thermal units last week, nearly 61% above pre-war levels.
Goldman Sachs analysts lifted year-end Brent oil price forecasts to $90 a barrel from $80, basing the expectation on a June-end return to normal for Gulf exports.
“Non-linear price increases are likely if inventories drop to critically low levels, which we have not seen in the last few decades,” they warned in a note.
President Donald Trump cancelled a trip to Islamabad by U.S. envoys for talks on the weekend, but investors were buoyed slightly by an Axios report that Iran seeks to make a deal on opening the strait first and postpone nuclear talks.
RATES AND HYPERSCALERS EARNINGS
Beyond oil derivatives and the even more stretched physical market, where jet fuel fetches $185 a barrel in Singapore, equity investors tried to look past the oil shock to an artificial intelligence trend viewed as unstoppable.
“AI is something that people are very optimistic about and very much considered a winner,” said Mike Seidenberg, senior portfolio manager for Allianz Technology Trust.
“It’s the top of the portfolio.”
Intel’s forecast last week for second-quarter revenue exceeding Wall Street expectations set off the latest round of buying, pushing the total value of the chipmaker-heavy stock markets in Taiwan and South Korea above that of Germany.
U.S. tech earnings due in the coming week include reports from 44% of the S&P 500 by market cap.
Capital expenditure plans will be in focus for firms such as Microsoft, Alphabet, Amazon and Meta Platforms, set to report on Wednesday, while Apple will report a day later.
Major central banks are set to stay on hold this week, though aggressive bets on future rate hikes in Britain and Europe could be tested if policymakers strike a cautious tone.
Frist off the rank on Tuesday is the Bank of Japan, which is expected to keep its short-term policy rate steady at 0.75%.
The U.S. Federal Reserve is also expected to hold rates at a meeting likely to be the last with Jerome Powell in the chair.
The European Central Bank and Bank of England are likewise expected to hold, but their tone and outlook could challenge market pricing for both banks to make two 25-basis-point hikes later in the year.
(Reporting by Tom Westbrook; Additional reporting by Dhara Ranasinghe in London; Editing by Edmund Klamann, Shri Navaratnam and Thomas Derpinghaus)
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