The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
1522 ET - Talks aimed at reopening the Strait of Hormuz led crude prices lower this week, although futures pull back some going into the weekend with no deal signed. Obstacles to an agreement include reluctance by Iran's Islamic Revolutionary Guard Corps to give up leverage, its insistence on charging fees to use the strait, and the lifting of the U.S. blockade, Mizuho's Robert Yawger says in a note. Other problems are hostilities between Yemen's Houthis and Saudi Arabia, and between Israel and Hezbollah, he adds. WTI settles up 1.2% at $78.18 a barrel, but down 7.7% for the week. Brent rises 1.3% to $83.55 for a 5% weekly loss. (anthony.harrup@wsj.com)
1323 ET - Oil futures move higher as the weekend approaches with the market still waiting for news on a deal to reopen the Strait of Hormuz. "The underlying situation is becoming more precarious because the buffer that has kept the market functioning up until now has largely been global stock levels," Baringa energy analyst Ellen Fraser says in a note. "But that buffer is eroding and stock levels are reaching decade lows." WTI is up 1.4% at $78.36 a barrel and Brent is up 1.3% at $83.59. (anthony.harrup@wsj.com)
1322 ET - The U.S. continues adding oil rigs as the Middle East conflict drags on, keeping crude prices high. The number of rigs drilling for oil rose by three this week to 454, Baker Hughes reports, which is 43 more than a year ago when the world was facing prospects of an oil glut. U.S. crude production has risen this year, averaging 13.8 million barrels a day in recent weeks, according to EIA estimates. Rigs drilling for natural gas fell by three this week to 124, or one more than a year ago. (anthony.harrup@wsj.com)
1039 ET - U.K. economic growth is set to slow after a "thumping start to the year," though momentum should remain healthy, Deutsche Bank's Sanjay Raja and Maui Brennan say in a note. GDP is expected to run at 0.4% on-quarter growth in the second quarter, which would mark a second consecutive quarterly upside surprise relative to forecasters' expectations at the start of the year, they say. "The U.K. economy now sits nearly 0.4% larger than what most expected coming into 2026." Looking ahead, the headline pace of growth is unsustainable, given it is running at nearly 1.8% on an annualized basis, the economists say. The energy shock should pass through over the coming months, with GDP growth averaging 0.1% on quarter for the rest of the year. (edward.frankl@wsj.com)
0939 ET - U.S. natural gas futures pick up some ground following losses the previous session on the expanding inventory surplus. "Bearish inclined traders appear hesitant in pressing the market lower given proximity to long-term support at the $2.50 area," Ritterbusch & Associates says in a note. Prices could still move toward long-term support barring some broad-based hotter weather patterns in the near term, the firm adds. "But even given such a change, the weather factor is beginning to lose effect as the cooling season winds down with the market forced to place a greater focus on the upcoming low-demand shoulder period." Nymex natural gas is up 1.6% at $2.683/mmBtu.(anthony.harrup@wsj.com)
0907 ET - Oil futures are returning some of yesterday's gains with the market still expecting some sort of deal to reopen the Strait of Hormuz. "While the reopening of the Strait of Hormuz is likely to drive a period of short-term market rebalancing and restore some confidence in global oil flows, any sense of stability is likely to be temporary," Joanne Salih, head of energy and resources strategy at Baringa, says in a note. "Even in the absence of active conflict, the possibility that Iran could again choose to restrict or close the strait will remain an enduring feature of the market." WTI is down 0.6% at $76.85 a barrel and Brent is off 0.8% at $81.87. (anthony.harrup@wsj.com)
0839 ET - Despite the 0.2% rise in output in June, German industrial production is still moving sideways at a low level, Commerzbank economist Marco Wagner says in a note. Data released earlier this week showed that, excluding large orders that are volatile on a monthly basis, manufacturing orders returned to their sideways trend after a brief upward breakout, he says. Due to low water levels in the River Rhine, the situation is unlikely to change over the summer. Any recovery after that will be slow, as Middle East developments stabilize and river levels rebound, Wagner says. However, the global economy is growing, from which German industry should also benefit, as it will from the government's continuing investment in defense and infrastructure projects, he says. (edward.frankl@wsj.com)
0704 ET - The dollar trades steady while Treasury yields turn slightly lower ahead of the U.S. nonfarm payrolls report at 1230 GMT. The probability of a U.S. interest-rate rise in September will depend heavily on data along with ongoing developments in the Middle East and price action in the Treasury market, MUFG Bank's Lee Hardman says in a note. "If the long end of the Treasury market becomes unanchored with yields marching higher ahead of the September FOMC meeting it would increase pressure on the Fed to hike rates to reinforce their inflation-fighting credibility," he says. The DXY dollar index trades flat at 99.919. The 10-year Treasury yield falls 0.6 basis points to 4.664%, Tradeweb data show.(renae.dyer@wsj.com)
0701 ET - German industry has proved resilient amid high energy prices, and the rebound in business surveys in July suggests the immediate outlook is relatively good, Capital Economics' chief Europe economist Andrew Kenningham says in a note. The 0.2% rise in German industrial production in June was the third consecutive monthly increase, allowing output to rise 0.7% in the second quarter. Production in energy-intensive sectors declined in June but over the second quarter it rose quite sharply, despite rising global energy prices, Kenningham says. Surveys such as the manufacturing output PMI and Ifo index suggest positive momentum in manufacturing may continue, although record-low water levels in the Rhine could dampen output in the coming weeks, he says. (edward.frankl@wsj.com)
0657 ET - German industrial production saw a slight increase in the three months through June, and given full order books, that recovery is likely to continue in the third quarter of the year, Deutsche Bank's Marc Schattenberg says. Production was up 0.7% in the second quarter, with production rising 0.2% on month in June. June's production was helped by a jump in automotive output, though it weakened in manufacture of machinery, the data show. Looking ahead, sentiment indicators, such as Ifo's business-climate index and the PMIs are also sending improving signals, Schattenberg says. However, in the short term, transport problems due to the Rhine River's low water levels could create challenges for industrial firms, he notes. (edward.frankl@wsj.com)
0654 ET - The Polish zloty would probably only temporarily recover if the Middle East conflict de-escalates in coming months and risk appetite improves, Commerzbank's Tatha Ghose says in a note. Some gradual depreciation in the zloty should resume next year as Poland's central bank could switch back to signalling interest-rate cuts quite quickly if the geopolitical impasse ends, he says. Political uncertainty also looks set to return with the 2027 general election and there's a risk the Law and Justice party or broader right-wing bloc wins, he says. Commerzbank expects the euro to fall to 4.25 zloty by December before rising to 4.40 a year later, compared to 4.2967 currently. (renae.dyer@wsj.com)
0643 ET - Palm oil closed lower, as market sentiment remains subdued ahead of key industry supply and demand data from Malaysian Palm Oil Board, Kenanga Futures analysts say. Expectations of higher palm oil inventories are also weighing on prices, they add. Kenanga Futures sees support and resistance for the October futures contract at 4,650 ringgit a metric ton and 4,740 ringgit a ton, respectively. The Bursa Malaysia Derivatives contract for October delivery fell 8 ringgit to 4,678 ringgit a ton.
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