The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
1339 ET - Oil futures are fluctuating between gains and losses after U.S.-Iran mediators propose a 10-day ceasefire and seek a return to negotiations following a weekend of military escalation that sent prices up overnight. "I think markets really want to get past this, so any piece of good news they're going to take it and run with it," says Tracy Shuchart of NinjaTrader Group. But "I think people are mispricing the risk here," she adds. The Houthis' declaration of a naval blockade against Saudi Arabia threatens the exit for Saudi oil through the Red Sea via the Bab el-Mandeb strait. "If you have the Strait of Hormuz closed, and you have the Red Sea effectively closed, we have a big problem," Shuchart says. WTI is up 0.3% at $82.70 a barrel and Brent gains 0.5% to $88.58. (anthony.harrup@wsj.com)
1039 ET - The dollar has failed to benefit from higher oil prices in July as markets focus on interest-rate differentials, Standard Chartered's Steve Englander says in a note. Since the resumption of U.S.-Iran strikes, the dollar has dropped. If the market expects the Federal Reserve to be less reactive to higher oil prices on the assumption of little or temporary inflation impact, the dollar could fall further in the near term, he says. Standard Chartered still expects dollar strength over the medium term. "However, we need to see either a clearer cyclical rebound in the U.S. economy or a more definitive upward move in equilibrium real [inflation-adjusted] interest rates before dollar strength emerges."The DXY dollar index rises 0.2% to 100.95.(renae.dyer@wsj.com)
0951 ET - Higher energy and food prices are likely to keep total inflation in Canada near 3% for the remainder of the year, says Michael Davenport from Oxford Economics. The end of the US-Iran ceasefire and the resumption of military attacks in the Mideast poses a significant risk to Canada's CPI outlook, Davenport adds. Offsetting this risk, however, is the amount of excess slack in the economy and continued easing in shelter inflation, which Davenport contends should keep core CPI at bay and the Bank of Canada on hold. (Paul.Vieira@wsj.com; @paulvieira)
0938 ET - Canada's total inflation decelerated to 2.8% in June, due mostly to lower gasoline prices following a pact in June between the US and Iran, says Andrew Grantham, economist at CIBC Capital Markets. Gas prices, however, have accelerated amid a renewal of military strikes in the Middle East. Grantham says prices rose 0.3% on a seasonally-adjusted basis when food and energy are excluded. He attributes this to temporary travel-related cost increases related to the World Cup matches in Toronto and Vancouver. The Bank of Canada's preferred measures of core inflation decelerated in June, and Grantham says this reinforces CIBC's call for the BOC to remain on the sidelines through 2026. (Paul.Vieira@wsj.com; @paulvieira)
0936 ET - Canadian inflationary measures are still looking relatively muted after four months of oil supply disruption, says Desjardins' Royce Mendes. The headline consumer price index fell 0.4% in June as lower global oil prices drove energy costs down, leaving annual inflation at 2.8%. Core inflation excluding food and energy picked up, rising 0.3% on-month in seasonally adjusted terms, though Mendes says that looks tied to the temporary effect of the World Cup. "Despite the recent spike in global oil prices, the Bank of Canada can rest easy that passthrough to other goods and services remains very limited," he economist says. (robb.stewart@wsj.com; @RobbMStewart)
0926 ET - U.S. natural gas futures are lower with LNG maintenance still curbing feedgas flows and a softer outlook for near-term power-sector demand. Heat and smoke from Canadian wildfires cleared over the northeast, raising solar energy output and lowering electricity demand, although Texas will see some triple-digit "feels like" temperatures by mid-week, Gary Cunningham of Tradition Energy says in a note. "Outlooks for power-sector demand and continued maintenance at LNG export terminals are simply too bearish for a rally," he adds. "The August contract is likely range bound between $2.80 and $2.95 until something changes." Nymex gas for August delivery is off 1% at $2.882/mmBtu. (anthony.harrup@wsj.com)
0920 ET - Oil futures pull back from the overnight highs reached on the military escalation in the Middle East as Iran says it has received proposals from mediators for a return to negotiations. Stepped up U.S. and Iranian strikes at the weekend pushed Brent and WTI to their highest levels in more than a month. "This movie has been seen before and as retail gasoline prices lift back up while Iranian oil revenue is again cut back, both sides will be looking for an off-ramp," Ritterbusch & Associates says in a note. WTI is up 0.2% at $82.68 a barrel and Brent is up 0.6% at $88.66. (anthony.harrup@wsj.com)
0900 ET - Interest-rate differentials have moved against the dollar, Societe Generale's Kit Juckes says in a note. "The market now prices a 90% chance of an European Central Bank [rate] hike in September (with a further adjustment expected after this week's meeting) and a 70% chance of a Federal Reserve hike." The ECB is more sensitive to oil prices due to its primary mandate to maintain price stability. That provides some cushion to the euro from rising oil prices in response to the Middle East conflict. While this isn't sustainable, investors betting on a higher dollar will need to be patient, he says. The DXY dollar index rises 0.1% to 100.861.(renae.dyer@wsj.com)
0837 ET - Sterling and U.K. government bond yields are little moved after Andy Burnham pledged to improve cost of living in his first speech as prime minister. He promised to end rough sleeping, help more young people into work and build more council homes. Burnham said he would set out some of his measures, including how to pay for them, on Tuesday. The euro falls 0.2% to 0.8487 pounds, little changed from levels before the speech. Ten-year gilt yields rise 2.3 basis points in response to the Middle East conflict, to last trade at 4.972%, Tradeweb data show. (renae.dyer@wsj.com)
0752 ET - Escalation of strikes in the Middle East has pushed energy markets away from the European Central Bank's mild scenario and toward the baseline, which strengthens the case for another quarter-point hike in September, says Antonio Garcia Pascual at Santander CIB. However, only a prolonged disruption with material damage to energy infrastructure would justify a broader hiking cycle, he says in a note. The ECB will focus on indirect inflationary effects through food and core and second-round effect via wages and inflation expectations. Further escalation in Hormuz would raise the risk of supply-chain disruption, he says. Eurozone inflation is likely to stay near 3% through the second half of the year, reaching 3.2% in December, he says. (edward.frankl@wsj.com)
0731 ET - The Norwegian krone has limited scope to extend its recent appreciation as the Norges Bank might not raise interest rates further, Rabobank's Jane Foley says in a note. The krone is finding support from the recent pick up in oil prices due to a re-escalation in the Middle East conflict as Norway is a major oil producer, she says. However, Norwegian price pressures were more moderate than expected in June. "On the back of doubts regarding further Norges Bank rate hikes, we expect euro-krone to stay close to the 11.00 level on a one-to-three-month view." The euro rises 0.1% to 11.0324 krone, having reached one-month low of 10.9920 earlier, according to LSEG. (renae.dyer@wsj.com)
0534 ET - U.S. Treasury yields rise as military hostilities in the Middle East escalate further, while the dollar is relatively stable amid demand for safe-haven assets. The Middle East conflict has lifted oil prices and could push Treasury yields higher as they reinforce market expectations of a rate hike by the Federal Reserve, Hola Prime's Somesh Kapuria says in a note. "Elevated energy costs could reinforce the expectations that the Federal Reserve could raise interest rates," he says. Despite weaker-than-expected inflation figures published last week, the Fed is still expected to increase rates before year-end, he says. The 10-year U.S. Treasury yield rises 1.7 basis points to 4.556%, according to Tradeweb. The DXY dollar trades steady at 100.785. (emese.bartha@wsj.com)
(END) Dow Jones Newswires
July 20, 2026 13:39 ET (17:39 GMT)
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