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The oil market, in can form (Getty Images)

These two charts show how the Iran war is causing markets to price in a longer oil supply crunch

The rise of third-month Brent futures relative to front-month this week is unprecedented since at least 1989.

Luke Kawa

For the oil market, aspirational rhetoric and coordinated action are telling one story, and the futures curve is telling quite another.

US-Israeli attacks against Iran, and the Gulf nation’s subsequent targeting of oil-producing nations in the region and attempts to deter the transport of oil through the Strait of Hormuz, have resulted in upheaval in global energy markets. Futures prices have pushed higher, closing above $100 per barrel for the first time since August 2022.

On Monday, US President Donald Trump said the war is “very complete, pretty much” and would be over “very soon.” That was later followed by member nations of the International Energy Agency agreeing to release 400 million barrels of oil from their reserves in a move to alleviate the supply crunch.

World powers other than Iran, and particularly US leadership, are trying to give the impression that this spike in energy prices won’t last long or be too severe.

Meanwhile, the story from the oil market this week has been the exact opposite: pricing in a longer stretch of higher prices.

Third-month Brent oil futures (for delivery in July, in this case) have jumped more than 10% this week. This would be just the 27th time that’s happened in the span of a week since February 1989. Usually, a big pop like that is associated with the outperformance of front-month futures because it’s a tied to a near-term supply shortage relative to demand. That’s what was going on the first week that markets were digesting this conflict, seemingly expecting a quick resolution.

Not so this time: this week is shaping up to be just one of seven in which third-month Brent futures rise 10% and outperform front-month futures, as of 9:20 a.m. ET. And for all those other instances, the outperformance of third-month futures was very modest. Again, not the case this time.

In other words, this looks to be (at least in my lifetime) the most aggressive repricing of not-so-short-term oil price risk. That’s an outcome that prediction markets are starting to coalesce around, as well. Event contracts suggest the implied probability is for the closing peak in front-month WTI futures by year-end to range from $135 to $140 in 2026. That’s meaningfully higher than the intraday peak of just shy of $120 seen on Sunday evening.

Read more: What analysts say they’re looking for next in the oil markets

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Ford raises its full-year guidance, receives $1.3 billion tariff refund

Ford reported its first-quarter results after markets closed on Wednesday. The automaker’s shares climbed roughly 7% in after-hours trading on the news.

For Q1, Ford reported:

  • Adjusted earnings of $0.66 per share, compared to the $0.18 per share expected by Wall Street analysts polled by FactSet. The figure includes Ford’s tariff reimbursement.

  • $43.25 in total revenue, vs. the $42.66 billion consensus forecast. Automotive revenue came in at $39.8 billion, compared to estimates of $38.9 billion.

  • A $1.3 billion tariff refund.

Ford boosted its full-year guidance for adjusted earnings before interest and taxes to between $8.5 billion and $10.5 billion, up from between $8 billion and $10 billion.

Late last year, Ford announced it would take $19.5 billion in charges — one of the largest write-downs ever — relating mostly to its EV business. Of those charges, $7 billion will be spread across this year and next, the company said.

Earlier this month, Ford recorded an 8.8% drop in Q1 sales from the same period last year, a similar result to Detroit rival GM, which posted a 9.7% sales drop.

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Microsoft beats on revenue and earnings in Q3, but only meets expectations for cloud growth

Microsoft shares dipped after the company reported strong Q3 earnings postmarket Wednesday, posting ​​sales of $82.9 billion for the quarter, beating FactSet analyst estimates of $81.4 billion. Earnings per share were $4.27, handily beating estimates of $4.05. 

In a closely watched number, Microsoft’s Azure cloud business increased 40% year on year, just above the 39.7% estimated. The metric technically beat expectations, but may not be the beat investors were looking for.

Total capital expenditure for the quarter was $31.9 billion, up 49% year on year, above estimates of $27.5 billion and down from Q2’s $37.5 billion.

One thing investors were eager to find out: how is the company doing in its effort to fulfill the billions in backlogged commercial bookings? Last quarter, the company reported a staggering $625 billion in remaining performance obligations, and 45% of that was for just one customer — OpenAI.

For the third quarter, Microsoft reported a backlog of $627 billion, up 99% year on year. The company said the RPO increase was 26% — in line with “historical seasonality” — when excluding OpenAI.

Breaking down the results by the company’s business lines:

  • ☁️ 🤖 Intelligent Cloud (Azure, server products): $34.7 billion in revenue, up 30% year on year.

  • 📝 📊 Productivity and Business Processes (Microsoft 365, LinkedIn, Dynamics): $35 billion in revenue, up 17% year on year.

  • 💻 🎮 More Personal Computing (Windows, Xbox, Bing): $13.2 billion in revenue, down 1% year on year.

Microsoft CFO Amy Hood said in the earnings release:

“We delivered results that exceeded expectations across revenue, operating income, and earnings per share, reflecting strong execution and growing demand for the Microsoft Cloud.”

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Sherwood Media, LLC produces fresh and unique perspectives on topical financial news and is a fully owned subsidiary of Robinhood Markets, Inc., and any views expressed here do not necessarily reflect the views of any other Robinhood affiliate, including Robinhood Markets, Inc., Robinhood Financial LLC, Robinhood Securities, LLC, Robinhood Crypto, LLC, Robinhood Derivatives, LLC, or Robinhood Money, LLC. Futures and event contracts are offered through Robinhood Derivatives, LLC.