The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
0916 GMT - AI investment is among a number of factors that are accelerating a rise in long-term bond yields, BlackRock Investment Institute says in a note. AI adds to the impact of prolonged supply shocks and heavy government borrowing, it says. "The structural forces behind higher bond yields have been building for several years but intensified this year." In this environment, government bonds provide less ballast--implying that they act as less of a stabilizing asset--but provide more income, "expanding the opportunity for durable income," the asset manager says. (emese.bartha@wsj.com)
0902 GMT - BP's results show new CEO Meg O'Neill's approach is starting to work, research director at XTB Kathleen Brooks writes. O'Neill got a boost from supportive market conditions that pushed oil and gas prices higher, but she has refocused the business around hydrocarbons, Brooks says. She has also had to navigate internal volatility after the ousting of the company's chairman in May, she adds. BP shares rise 1% to 557.70 pence.(adam.whittaker@wsj.com)
0849 GMT - BP seems to be taking a more selective approach to selling assets after lowering its disposal guidance to between $8 billion and $9 billion for this year, RBC Capital Markets analyst Biraj Borkhataria writes. The British energy major had previously guided for up to $10 billion. This is a sensible approach given the stronger macroeconomic environment, he writes. Overall, BP's new five priorities to turn the company around fall under the general bucket of "do better", he adds. "BP will need to 'walk the talk' consistently over the coming quarters to re-build investor confidence," he says. BP shares rise 1% to 557.70 pence. (adam.whittaker@wsj.com)
0818 GMT - The steepening of the U.S. 2-30-year Treasury yield curve after last week's Federal Reserve meeting reflects growing inflation worries and uncertainty over how the Fed will respond, BlackRock Investment Institute says in a note. This isn't anything new but a continuation of thebroader macro regime over several years, it says. "The fastest AI investment buildout in history is unfolding in a world shaped by supply scarcity, where energy constraints, tight labor markets and geopolitical fragmentation are shifting the focus from efficiency to resilience." Meanwhile, governments and hyperscalers are drawing on the same pool of savings, intensifying competition for capital and these forces are pushing investors to demand higher returns to lend for longer, it says. (emese.bartha@wsj.com)
0802 GMT - Current oil prices include only a modest geopolitical risk premium despite persistent uncertainty in the Middle East, analysts at Goldman Sachs say. The U.S. bank estimates that Brent crude, the global oil benchmark, is fairly valued at around $80 a barrel based on oil inventories, expected demand from OECD countries, its estimate of the long-term value of oil and historical trading patterns linking inventories to prices. Goldman expects Brent to remain in its $80-$90 range until either a new U.S.-Iran deal is reached or the conflict escalates significantly. Still, the physical market is getting tighter amid lower flows from the Persian Gulf and the Red Sea, lower Russian oil exports, and stronger Asian imports. "Our estimated Persian Gulf flows edged down to 36% of prewar levels versus nearly 80% of prewar levels in the first half of July," they say. (giulia.petroni@wsj.com)
0755 GMT - China's activity indicators likely softened in July, partly due to extreme weather events and a seasonal slowdown, according to Citi analysts in a research note. Citi expects industrial growth to decelerate to 4.8% on year in July from 5.3% in June, with production subindex in the PMI survey slipping into contractionary territory. The reading could still be higher than the low rates seen in April and May, thanks to the buoyant high-tech sectors and a "more benign base", the analysts say. "An investment rebound may not take place in July with weather events and yet-to-accelerate policy deployment," they say. (tracy.qu@wsj.com)
0747 GMT - British energy major BP has received unsolicited approaches expressing interest in its North Sea oil assets, the company's CEO Meg O'Neill tells CNBC. O'Neill has told new U.K. Prime Minister Andy Burnham that the country should prioritize using oil and natural gas reserves from the North Sea, she said. "We generate jobs, we generate tax revenue, we generate all those additional positive impacts." BP shares rise 1.2% to 558.7 pence. (adam.whittaker@wsj.com)
0738 GMT - Oil prices rebound after Monday's selloff, with Brent crude up 1.3% to $84.82 a barrel and WTI up 0.6% to $80.78 a barrel. The benchmarks settled 4.7% and 5.1% lower, respectively, in the previous session after Iran rejected President Trump's suggestion that talks were under way. "Oil sold off sharply yesterday on optimism that a Middle East deal might be within reach," analysts at ING say. "However, markets may be getting ahead of themselves once again [...] We've been in this situation multiple times before, only to see things unravel." Meanwhile, shipping traffic in the Gulf remains dangerous, with the U.K. Maritime Trade Operations agency saying Monday that a cargo vessel off the Omani coast was struck by an unknown projectile. (giulia.petroni@wsj.com)
0724 GMT - Yields on U.K. government bonds are fairly steady in early trade. Geopolitical concerns subsided after the U.S. halted planned attacks against Iran, although uncertainty remains after Iran said Monday there were no talks underway with the U.S. Markets are optimistic that the U.S. and Iran will reach a deal as neither wants all-out war. Ten-year gilt yields rise 0.6 basis points to 4.958%, Tradeweb data show. (miriam.mukuru@wsj.com)
0704 GMT - Bitcoin stays under pressure following renewed U.S.-Iran tensions and after crypto hoarding firm Strategy announced it sold bitcoins last week. President Trump said Monday Iran was "unbelievably duplicitous," claiming Tehran had asked for talks on ending the war before denying discussions were taking place. Strategy said Monday it sold 1,638 bitcoin for $104.73 million last week, marking the third time the company has sold the cryptocurrency this year. Meanwhile, bitcoin owners continue to reel from a hack of bitcoin storage device Coldcard. Bitcoin falls 0.2% to $63,626, LSEG data show. (renae.dyer@wsj.com)
0656 GMT - Eurozone government bond yields are little changed, tracking a similarly steady trade in U.S. Treasury yields. Developments in the Middle East remain the key driver for government bonds. Iran said Monday there were no talks underway with the U.S. after President Trump said he cancelled a strike on the country to allow for negotiations. "We are still positive that a deal will be reached eventually as both the U.S. and Iran do not want to go an all out war," Jefferies' Mohit Kumar says in a note. Eurozone bond supply is fading this month due to the seasonal issuance slowdown.The 10-year Bund yield is stable at 3.148%, according to LSEG. (emese.bartha@wsj.com)
0644 GMT - The dollar rises as renewed concerns over U.S.-Iran tensions lift oil prices and the impact of recent U.S.-Japanese joint interventions to support the yen starts to fade. Iran said Monday there were no talks underway with the U.S. after President Trump said he cancelled a strike on the country to allow for negotiations. In response, Trump said Iran was "unbelievably duplicitous." U.S. and Japanese authorities confirmed joint intervention to shore up the yen last week, which had caused the dollar to weaken. The DXY dollar index rises 0.1% to 100.008 after hitting a seven-week low of 99.418 Monday. The dollar rises 0.3% to 157.61 yen after reaching a three-month low of 155.21 Monday, according to LSEG.
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