04:54 PM EDT, 03/26/2026 (MT Newswires) -- (Updating to include just published commentary from Macquarie Group in first paragraph and paragraphs 8-10 inclusive)

The Toronto Stock Exchange closed lower on Thursday as the options market was seen signaling rising risk of oil prices rise to US$150 per barrel with the Strait of Hormuz still shut, while one Macquarie strategist is raising the full year 2026 oil price forecast as the global economic outlook is driven by military developments in the Middle East, and another says recent preliminary PMIs suggest the global economy is in the "foothills of stagflation."

The S&P/TSX Composite Index closed down 495.08 points, or 1.5%, to 31,887.52, with most sectors lower amid ongoing uncertainty around when the Middle East war will end, and when the Strait of Hormuz might open. Thursday's losses came after the index had gained more than 1,000 points over the first three sessions this week, but also had lost more than 1,600 points over the three days prior to that.

Of sectors, Base Metals was the biggest loser, down 3.6%, with gold futures retreating as oil prices rose along with the dollar and bond yields. Gold for April delivery was last seen down US$194.60 to US$4,390.90 per ounce.

Energy, down 0.2%, was weaker too, even as West Texas Intermediate crude oil closed up 4.6% as hopes for a quick end to the war on Iran faded after the Islamic Republic rejected a U.S.15-point ceasefire proposal, responding with a five-point plan of its own that included demands for reparations and sovereignty over the Strait of Hormuz. WTI oil for May delivery closed up US$4.16 to settle at US$94.48 per barrel, while May Brent oil was last seen up $5.58 to US$107.90.

Reuters on Thursday reported traders are piling into oil options betting Brent crude will surge to a record high of at least US$150 a barrel by the end of April, as the war in the Middle East continues to choke supplies through the Strait of Hormuz. Reuters noted Brent has shot up nearly 50% since Feb. 28, when the U.S.-Israeli war on Iran broke out, effectively blocking oil transit through the Strait of Hormuz. Prices remain volatile despite tentative signs that Washington and Tehran are looking for a way to end the conflict, it added.

Reuters noted options trades in the derivatives market show bets have risen tenfold in the last few weeks on oil hitting at least US$150 a barrel by the end of April, as traders position themselves for near-term volatility. That would surpass Brent's record high of $147 a barrel set in 2008, when booming demand strained supply capacity.

Data from ICE shows the volume of the contracts which expire at the end of April and give the holder the option to buy June Brent futures at US$150, known as call options, is almost 10 times larger than it was a month ago, the Reuters report added.

Meanwhile, Macquarie Group after close of trade published its quarterly Commodities Compendium, led by Peter Taylor, Head of Commodity Desk Strategy. Going forward, the Macquarie team believes the timing of the re-opening of the Strait of Hormuz and physical damage to energy infrastructure is the main determinant of the longer term impact on commodities.

Macquarie outlines two scenarios. One, the war ends at the end of March. Two, the war continues until end of June, with oil prices equal to US$200.

The bank raised its full year 2026 oil price outlook, with WTI averaging near $US83 per barrel, up from near US$58 per barrel as the current Middle East conflict has resulted in a large supply disruption. In addition, it has lowered its FY 2026 U.S. natural gas outlook, down from $3.80/mmBtu to near $3.10/ mmBtu. Macquarie's forecast for FY'26 and FY'27 sits below the forward curve as the bank continues to anticipate that storage will exceed expectations as higher crude price incentivizes production growth, yielding more associated gas.

On economic matters, Thierry Wizman, Global FX & Rates Strategist at Macquarie Group, said earlier today the first batch of preliminary PMIs from around the world this week suggest that the global economy is in the "foothills" of stagflation. "To wit," he added, "service activity indicators are lower, costs and selling prices are higher. Where manufacturing is stronger, it seems to be induced by worries about inventory depletion because of materials shortages."

Wizman said commodity markets are also signaling the "foothills of stagflation". On days such as today, he added, when crude oil prices rise because of perceived shortages of crude, the price of copper has typically declined. Wizman noted copper is considered to be sensitive to broad economic growth conditions and essential for the growth economy. "That's as if to say that an extended crude oil shortage will impair economic activity and growth, negating the demand for the most growth-associated materials."