Written on: March 2, 2026
Monday, March 2, 2026
Petroleum futures are soaring sharply as of this writing on Monday morning amid news of US and Israeli military action against Iran, despite a sell-off in global equities and a rally in the US dollar index. Market participants looked ahead to the final February US Manufacturing PMI and to the ISM Manufacturing Index for further direction.
In major news over the weekend, Bloomberg reports that US and Israeli forces fired missiles across Iran on Saturday, reportedly taking out Iran’s Supreme Leader Ayatollah Khamenei, along with other high-ranking Iranian officials. Following these attacks, Tehran responded with a wave of strikes against Israel and US military bases in Saudi Arabia, Qatar, the UAE, Kuwait and Bahrain. According to Bloomberg, Aramco stopped all operations at Saudi Arabia’s largest oil refinery at Ras Tanura on the Persian Gulf coast following an Iranian drone strike in the area, with nearly all tanker traffic through the Strait of Hormuz halting amid escalating conflict in the region.
Japan’s final S&P Global Manufacturing PMI came in at 53.0, slightly above the 52.8 reading the month prior. India’s final HSBC Manufacturing PMI for the same month came in at 56.9, missing the 57.5 flash estimate. Moreover, industrial production in India rose by 4.8% year-on-year in January, well below expectations calling for a larger 6.0% yearly growth in output. Asian markets closed mostly lower overnight as the Shanghai Composite in China gained 0.47%, while the Nikkei in Japan lost 1.35% and Hong Kong’s Hang Seng dropped 2.14% lower.
German retail sales fell by 0.9% month-on-month in January, missing the Bloomberg survey consensus calling for no change. The Final February S&P Global Manufacturing PMI for the UK came in below the 52.0 flash reading, at 51.7. The index for Germany (50.9) and France (50.1), on the other hand, came in above the 50.7 and 49.9 flash estimates, respectively. The HCOB Manufacturing PMI for the Eurozone as a whole was finalized at 50.8, as widely expected. European shares were selling off this morning with the UK FTSE 100 down 1.24%, the French CAC 40 having lost 2.03%, and with the German DAX having dropped 2.34% lower. In the US, futures for the major stock market indexes are seeing losses of between 1.12% (S&P 500 futures) and 1.4% (Nasdaq futures). As of this writing, the US dollar index had rallied 0.90% higher, which is unsupportive for crude oil prices.
The complex saw gains of over two percent last Friday following reports of disappointment in the American delegation after a third round of US-Iran nuclear talks and weakness in the US dollar index, despite a sell-off in US shares. Brent crude settled $1.73 higher at $72.48 a barrel, WTI crude rose by $1.81 to close at $67.02, gasoline futures added 4.56 cents to hit $2.0779 per gallon, heating oil jumped 5.84 cents higher to $2.6709 per gallon and natural gas futures settled 3.2 cents stronger at $2.859 per MMBTU.
The latest 1-5 day GEFS outlook sees above-normal temperatures across the continental US. Over the next 6-10 days, well-above-normal temperatures are expected throughout the eastern half of the country.