Edward Meir's week in review and thoughts for the week of April 20, 2026

Not surprisingly, oil prices were struggling for much of last week. And they collapsed on Friday after Iranian Foreign Minister Abbas Aragchi said in a tweet that the Strait of Hormuz would be “completely open” to commercial shipping for the remainder of the two-week ceasefire. President Trump acknowledged this and even thanked the Iranians. The US would help Iran open the passageway and clear mines, he said.

Brent settled 9% lower on Friday, close to a five-week low. WTI lost roughly $12 per barrel (bbl) on the day, settling at $85.57/bbl. For the week, both contracts ended 13% lower and have now rolled back more than half of their post-conflict advance. There were sharp losses in diesel (down 10% on the week). But gasoline held up better, finishing with only a mild decline. Natural gas prices ended the week pretty much unchanged at $2.67/bcf. But European gas prices dropped 7% on Friday and had a losing week.

And then the Strait of Hormuz closed (again)

Alas, much of Friday’s apparent progress started melting away almost as soon as it began. Just an hour after Iran’s foreign minister put out his tweet, the Iranians walked backed his statement. They said it contained “various ambiguities about the conditions for passage, its details, and its mechanisms.” The Iranians later made it clear: the Strait would not reopen until the US blockade of Iranian ports was lifted. And President Trump said that was not happening. 

Things deteriorated further over the weekend. Iranian gunboats fired on a tanker trying to pass through the Strait on Saturday. A second vessel was hit by a projectile as well. Ship tracking satellites showed that, of the 25 vessels that started heading out of the Strait on Friday, 12 U-turned and headed back under Iranian pressure. “The Iranian authorities appear to still be acting like bouncers, picking and choosing which ships are allowed to pass through the Strait,” one shipping executive told Reuters.

With the ceasefire now due to expire on Tuesday, we have to suspect the immediate task on hand is to see if it can be extended. But even that modest step remains uncertain at this stage. As a result, we expect markets to open on the back foot as we head into the new week. And we would not be surprised to see a good portion of Friday’s losses in oil recouped once trading in Asia gets underway.

Equities and treasuries

In other markets, US equities delivered a strong performance last week. Two of the three major indices moved into record territory. (The Dow was the exception). The S&P 500 was up an impressive 4.5% on the week. NASDAQ tacked on almost 7%. The Dow ended 3.2% higher. Q1 earnings continue to stream in, with most companies handily beating estimates. The pace of announcements will increase over the next two weeks. And we could be on track to exceed estimates of a 14% y/y advance in earnings.

US treasuries had a strong finish to the week as yields fell to one-month lows. The two-year yield settled at 3.70% (down 10 basis points on the week). The 10-year yield ended at 4.25% (seven basis points lower). The general dollar index continued its decline and has now rolled back practically all its post-conflict gain.

Base Metals

Base metals had a solid week. Aluminum was the relative laggard. It rose only by 1.9% after earlier gains were trimmed on Friday on news that the Strait could re-open. Copper finished up by 4%. Zinc and lead ended up 2% and 3.4%, respectively. Tin and nickel finished up 5% each.

We are watching nickel closely because prices are now at one-month highs. Two variables are behind nickel’s recent rise. The first has to do with the Indonesian government enacting upward revisions to its nickel ore benchmark pricing formula, thus raising the minimum price smelters must pay miners.

Pricing for nickel ore will now take the content of iron, cobalt, and chromium into account. Previously, only nickel content was incorporated into the calculation. Earlier in the month, the Indonesian government also capped 2026 mining quotas at 260-270 million wet metric tons, down from the 379 million tons negotiated in 2025. “Mining-side costs will undoubtedly rise, and such cost pressure is expected to be gradually transmitted across the downstream supply chain,” a nickel trader told Reuters.

Iran War leads to sulfur squeeze

A second element supporting nickel of late comes from the input side. Sulphur is a critical ingredient for nickel/MHP production. Given that it is a byproduct of petroleum and LNG refining, it comes as no surprise that the Middle East accounts for about a quarter of global sulfur supply. (The Mideast also supplies 75% to 80% of Indonesia’s needs.)

Sulphur prices about doubled to between $800-$1000/ton compared with around $500 before the war started. In response, several Chinese nickel producers have begun cutting output. Further contributing to the sulfur squeeze, China said early in April that it would halt sulfur exports as of May 1 because the raw material is also needed by the country’s copper smelters. China exported 4.65 million tons of sulfuric acid in 2025, up 74% y/y. But during the first two months of the year, exports were only 385,000 tons, down nearly 50% from a year earlier.

Precious metals

In the precious metals space, both gold and silver had decent gains last week. Nearby gold futures ended up by about $100/ounce on the week, getting to a one-month high. Silver tacked on roughly $5/ounce on the week to finish on Friday at just under $81/ounce.

Macro readings and other news from the past week

• US producer prices increased by 0.5% month-over-month in March (consensus 1.2%) following a downwardly revised 0.5% increase in February. The core rate rose by just 0.1% (consensus 0.4%) following a revised 0.3% increase in February. However, the year-over-year readings were not as constructive, with the index running at about 4.0%, versus 3.4% in February. The core y/y was up by 3.8%, unchanged from February as well. All in all, this was still a good reading because we thought we would see more of a spike on account of the rise in energy prices.

• Existing home sales decreased 3.6% m/m in March to a seasonally adjusted annual rate of 3.98 million (consensus 4.01 million) from 4.13 million in February. Sales were down 1.0% on a y/y basis. In related data, the weekly MBA mortgage applications index came in at 1.8%, up from the nearly 1% decline seen the week prior. Finally, the April NAHB housing market index fell to 34 from the prior reading of 38.

• March industrial production fell by 0.5% (consensus 0.1%) from an upwardly revised gain of 0.7% in February. The two numbers in effect cancel each other out.

• We learned China’s Q1 GDP came in at 5%, slightly ahead of estimates and also ahead of the 4.5% reading from Q4 2025. (Of all the Chinese statistics we see, we have the least faith in the GDP data.) Separately, China’s March industrial output for Q1 rose 5.7% y/y, coming ahead of estimates as well. But retail sales grew by only 1.7%, falling short. Fixed-asset investment was up by 1.7% in Q1 and has been anemic for much of the last two years. Finally, property investment again fell sharply, down 11.2% from the same period a year earlier.

• Chinese steel mills lowered crude steel production in Q1 2026 by about 4.6% y/y to 247.5 million metric tons. Production of finished steel was down by a lesser amount (1.7% y/y). Meanwhile, global steel demand is forecast to increase by 0.3% to 1.72 billion tons in 2026, according to the latest World Steel Association outlook. The association noted that the continuing conflict in the Persian Gulf could change the outlook going forward.

• Worldsteel expects Chinese demand to drop in 2026 by 1.5%. But Indian demand is expected to grow by 7.4% in 2026 and by 9.2% in 2027. The US market is expected to grow by 1.7% this year and by 2.0% in 2027, with data center construction being the main demand driver. Worldsteel expects infrastructure and defense spending to support both the European and UK markets, with each expected to grow by 1.3% in 2026 and 3.0% in 2027.

• In response to the recent spike in oil prices, the International Monetary Fund (IMF) cut its growth outlook last week. The global economy is now expected to grow by 3.1% this year, down from the Fund’s January forecast of 3.3%. Compared to the oil shocks of the 1970s, “the global economy is much less oil dependent now than it was back then,” IMF Managing Director Kristalina Georgieva noted. That’s a key reason why the Fund is not calling for runaway inflation. Not surprisingly, the IMF expects the Middle East to be the biggest growth casualty, with growth estimates for the region cut in half to just under 2%. Iran’s economy is expected to contract by a whopping 6.1% this year. US growth is expected to come in at 2.3% in 2026, with the estimate revised slightly lower from January. China’s growth should come in lower as well, at 4.4%. Eurozone growth was revised downward by 0.2% to 1.1%. “Had it not been for this shock, we would have been upgrading global growth,” Georgieva noted.

• The International Energy Agency (IEA) said the Iran War has “thoroughly upended the global outlook for oil consumption.” It now predicts an 80,000 barrel per day (bpd) drop in oil demand growth this year, down from a 640,000-bpd rise forecast in March. Q2 is going to experience an especially drastic fall. The IEA projects a 1.5 million bpd decline in demand growth – the deepest contraction since COVID. The agency said that the deepest cuts will be evident in the Middle East and Asia-Pacific, particularly for naphtha, LPG, and jet fuel. On the supply side, the IEA noted that global crude output is expected to fall by 1.5 million bpd this year versus last year – a staggering 2.6 million bpd negative swing from its March forecast, when the agency called for a 1.1 million bpd increase. “Resuming flows through the Strait of Hormuz remains the single most important variable in easing the pressure on energy supplies, prices, and the global economy,” the IEA concluded.

This week’s US macro readings

It will be a fairly light week on the US numbers front. There will be no releases on Monday or Wednesday. Tuesday brings us March retail sales (expected up 1.5%, last up 0.5%, while the ex-auto number is expected to come in at 1.4%, last 0.5%). March pending home sales also come out on Tuesday. Thursday brings us weekly initial claims (expected at 210,000, last 207,000) along with the flash S&P manufacturing and service PMI readings for April. On Friday, we get the final reading for April consumer confidence (expected at 49, last 47.6). But for an eighth straight week, focus will very much be on the Middle East.

We wish all our readers all the best for the upcoming week.