Sector Update: Energy Stocks Fall Premarket Monday

Natural gas futures are lower with little change in the weather outlook over the long weekend as spring advances and demand for heating gives way to use of air conditioning. "National demand is still expected to be light to very light most of the next 15 days, just with heating degree days fading to below normal levels, while cooling degree days increase to slightly greater than normal due to a little hotter than normal temperatures over several regions of the U.S.," NatGasWeather.com says in a note.Nymex natural gas is off 1.9% at $3.181/mmBtu. (anthony.harrup@wsj.com)

Energy stocks fell premarket Monday as the Energy Select Sector SPDR Fund (XLE) recently declined by 0.9%.

The United States Oil Fund (USO) was down 1.9% and the United States Natural Gas Fund (UNG) was 2.3% lower.

Front-month US West Texas Intermediate crude oil was down 2.4% at $62.45 per barrel at the New York Mercantile Exchange. Global benchmark North Sea Brent crude oil lost 2.3% to $66.40 per barrel, and natural gas futures were 2.6% lower at $3.16 per 1 million British Thermal Units.

Phillips 66 shares were down more than 1% after the company asked shareholders to support its board nominees over those proposed by activist investor Elliott, raising concerns over potential conflicts of interest.

Oil prices sagged early on Monday as wider markets decline amid expectations for weaker U.S. growth as President Donald Trump squabbles with the Federal Reserve and amid progress on talks over Iran's nuclear program.

West Texas Intermediate crude oil for May delivery was last seen down US$1.61 to US$63.07 per barrel, while June Brent crude dropped US$1.58 to US$66.38.

Citing comments from Iran's foreign minister, Reuters on Monday reported talks with the United States are nearing a framework for a deal over its nuclear program after the Trump Administration last week imposed further sanctions on its oil exports.

"The motivation for Iran is all but clear, if the US pursues a threatened culling of Iran's oil industry the resulting harm to the Islamic Republic's economy is likely devastating," PVM Oil Associates noted.

A deal between the two countries could see Iran gain wider access to international markets for its oil exports, even as supply remains robust as OPEC+ readies to add 411,000 barrels per day to to the market next month as its rolls back some production cuts.

Concerns over the health of the U.S. economy are also making markets nervous, with futures pointing to a lower open for U.S. stock exchanges and gold rising to yet another record with the dollar trading at a three-year low. Bloomberg reported Donald Trump is threatening to fire Federal Reserve Chair Jerome Powell as the president pushes for lower interest rates, even as his tariff policies threaten to boost inflation and hobble growth. Powell has said he will not resign if pressed to by the President.

Oil futures are lower as U.S. markets return from the long Easter holiday weekend in which Iranian officials described as positive talks with the U.S. over a nuclear deal. The negotiations "may eventually lead to more Iranian crude on the market," while OPEC+ remains on track to increase output in May, Terence Hove of Exness says in a note. At the same time, concerns over U.S. tariff policies continue to raise doubts about the strength of global fuel demand, he adds. WTI is down 2.3% at $63.18 a barrel and Brent is off 2.2% at $66.50 a barrel. (anthony.harrup@wsj.com)

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Countries Weigh Punching Back on Tariffs; Trade War Creates Winners By Liz Young

Avoiding a trade war with the U.S. appears to be simple: Just don't fight back.

That strategy has paid off for much of the world after President Trump placed a three-month pause on some of his highest across-the-board tariffs.

The WSJ's David Luhnow, Kim Mackrael and Bertrand Benoit report that countries negotiating with Trump are now having to decide whether to stick with that approach or use the threat of retaliation as leverage to get Trump to permanently change his tariff plans.

Retaliation comes with its own risks, including that the tactic can backfire onto the countries pushing back. China has come out swinging against Trump and has found itself in an all-out trade war with the U.S.

But countries could feel growing pressure to put tariffs on U.S. goods and services if Trump doesn't show a willingness to back down or strike a deal to lower trade barriers on both sides.

Economists warn that retaliation raises the prospect of a debilitating trade war. And because the U.S. is applying tariffs to virtually all other countries, it would likely be among the hardest hit nations.

Supply-chain technology vendors are rolling out artificial intelligence-powered programs to help predict the impact of new tariffs. (WSJ) Tariffs dominated the conversation at the New York Auto Show. (WSJ) Quotable

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Economy & Trade

Small businesses benefiting from President Trump's tariff blitz are cautiously optimistic about the new trade landscape. The WSJ's Rolfe Winkler and Ruth Simon write that while most businesses are struggling to navigate the president's zigzag on trade policies, some companies are seeing demand rise .

Ellwood Group, which makes forged steel, nickel and aluminum products, saw sales jump 35% in the first quarter from the previous period as some large construction projects switched from Asian suppliers to U.S. companies that buy Ellwood's raw materials. At Big Time Advertising & Marketing, an ad agency for car dealerships, revenue has climbed nearly 40% this year as clients seek to appeal to potential buyers spooked by tariffs.

Still, some of the businesses are seeing a big jump in inquiries but a much smaller uptick in sales, leading some companies to hold back on investments until they can better predict how long-lasting any tariff-related gains will be. Number of the Day In Other News

U.S. jobless claims fell to 215,000 for the week ended April 12, matching a two-month low. (MarketWatch)

A gauge of manufacturing activity in the Philadelphia region came in sharply lower in April. (MarketWatch)

Discount retailers such as Dollar Tree and Academy Sports & Outdoors are attracting higher-income shoppers amid economic uncertainty. (WSJ)

As the U.S. steps up chip-export restrictions, Nvidia has maintained its China presence by making versions of its processors that qualify for sale there. (WSJ)

American propane is becoming prohibitively expensive for Chinese plants that turn it into a key ingredient of plastic. (WSJ)

China's imports of U.S. liquefied natural gas have completely stopped for more than 10 weeks. (Financial Times)

The U.S. attacked a key Yemen oil port controlled by the Houthis and killed dozens of people. (Bloomberg)

Garment workshops are closing across a Guangzhou, China, district known as "Shein Village." (Nikkei Asia)

China-founded e-commerce sites Temu and Shein plan to raise prices for U.S. customers starting this week. (Chicago Sun-Times)

The Department of Transportation scrapped a Biden-era rule regulating greenhouse gas emissions. (The Trucker)

Mack Trucks is laying off between 250 and 350 workers in Pennsylvania. (FleetOwner)

Florida-based reefer carrier Davis Express is shutting down due to rising costs, flat rates and more crash lawsuits. (Commercial Carrier Journal)

An Amazon worker was rescued after becoming stranded on machinery at a fulfillment center in Sacramento, Calif. (Sacramento Bee)

About Us

Mark R. Long is editor of WSJ Logistics Report. Reach him at [mark.long@wsj.com]. Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long , Liz Young and Paul Berger .

This article is a text version of a Wall Street Journal newsletter published earlier today.

Lithium carbonate prices fell below CNY 71,000 per tonne in April, their lowest in four years as supply continued to outpace demand.

Sales of new energy vehicles in China rose by 38% annually to 991,000 in March according to the China Passenger Car Association, but missed the entity's expectations of 1,000,000 in despite ongoing government subsidies that promote vehicle exchanges and energy transition technologies.

The data was in line with recent trends that China's EV market has not grown at the pace expected following the boom at the turn of the decade, resulting in subsidies for battery producers by Beijing that triggered a surge in output and a supply glut.

Consequently, battery inventories are set to remain elevated as EV manufacturers display no rush for new deals.

Still, supply is not expected to slow at the market pace since lithium miners refrain from closing operations to retain market share and business relationships with governments and battery producers.