The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
1933 ET - Oil declines in early Asian trade amid growing optimism over the reopening of the Strait of Hormuz, a critical waterway through which one-fifth of the world's oil is transported. "Iran said it reached an agreement with Oman on a proposed route for shipping through the waterway, however, the details are still to be ironed out," ANZ Research analysts note. "Both inbound and outbound routes are said to be at the northern part of the Strait in Iranian territorial waters," the analysts say in a research report. Front-month WTI crude oil futures are 0.3% lower at $74.98 per barrel. (ronnie.harui@wsj.com)
1931 ET - The start of construction of NexGen Energy's Rook I uranium project in Canada could put the company in takeover crosshairs, suggests Shaw & Partners. Analyst Andrew Hines says NexGen is entering its next phase as a company. Construction brings a different form of risk and the market's attention will shift to execution, Shaw says. "It is also likely to see NexGen come under increasing scrutiny from strategic buyers," Shaw says. "Rook I is a world class asset that would fit into any major mining company's portfolio." Rook I has the potential to generate annual Ebitda of more than C$3 billion. That would make it one of the most profitable mines in the world, in any commodity, Shaw says. It retains a "buy" call on NexGen. (david.winning@wsj.com; @dwinningWSJ)
1504 ET - Oil futures end little changed in a choppy session as Iran says it has agreed with Oman on a shipping route through the Strait of Hormuz, but that safe passage will depend on third parties not obstructing the process, an apparent reference to the U.S. "The deal to open the Strait of Hormuz just got closer to reality," Mizuho's Robert Yawger says in a note. "Perhaps the biggest question is whether Iran's Islamic Revolutionary Guard Corps are on board with the agreement," he adds, noting that IRGC breached the June agreement by shooting at ships in the strait. WTI settles down 0.7% at $75.22 a barrel and Brent inches up 0.1% to $79.45 a barrel. (anthony.harrup@wsj.com)
1445 ET - U.S. natural gas futures edge up in rangebound trading ahead of the EIA's weekly storage report. Comfortable storage levels, with inventories more than 6% above the five-year average, have kept a lid on prices even with hot summer weather driving power-sector demand for gas. Analysts in a WSJ survey expect a 31 Bcf storage build for last week, which would extend the inventory surplus to 193 Bcf from 185 Bcf the week before. "A result below 30 Bcf could offer prices some support, but an in-line or larger build would reinforce the market's focus on elevated storage as summer demand approaches its seasonal decline," Gelber & Associates says in a note. Nymex natural gas settles up 0.2% at $2.688/mmBtu.(anthony.harrup@wsj.com)
1221 ET - HSBC Global Research cut its target price on Saudi Aramco to SAR29.00 from SAR30.80, reflecting lower Brent price assumptions of $80 a barrel in 2026 and $65 thereafter. The bank reduced its 2026 net income and cash flow forecasts by 9%, while cutting its 2027 earnings and cash flow estimates by 11% and 9%, respectively. HSBC says uncertainty over the duration of the Strait of Hormuz disruption, the pace of production recovery and Aramco's premium valuation relative to international oil majors leaves the stock's risk-reward broadly balanced. It maintains a Hold rating. (farhan.rafid@wsj.com)
1135 ET - Qatar stocks lead Gulf markets higher as hopes for a deal to reopen the Strait of Hormuz improve. U.S. Treasury Secretary Scott Bessent said Tuesday that an agreement to reopen the waterway could be reached soon. Qatar's QE index rises 0.9%, the Dubai Financial Market General Index gains 0.4%, Saudi Arabia's Tadawul All Share Index adds 0.3% and Abu Dhabi's benchmark index edges up 0.1%. (farhan.rafid@wsj.com)
1124 ET - U.S. commercial crude oil stocks rose by 2.5 million barrels last week, contrary to market expectations for a moderate withdrawal. The increase followed a 7.2 million barrel decline the previous week. "It's a welcome sign for investors worried about an energy crunch. The nerve-racking drawdowns are abating for now," says David Russell of TradeStation in a note. "Oil markets may have a window to stabilize if the Hormuz traffic resumes soon." Crude futures are lower in expectation of an agreement being reached between the U.S. and Iran to reopen the waterway. WTI is off 0.8% at $75.16 a barrel and Brent is off 0.5% to $78.97.(anthony.harrup@wsj.com)
1045 ET - European natural-gas prices plunge 7% in afternoon trading, with the benchmark Dutch TTF at 51.99 euros a megawatt-hour as renewed diplomatic efforts to end the Iran war lift sentiment. Fundamentals, however, remain supportive. A prolonged heatwave across Europe is lifting cooling demand at a time when gas storage is around 57% full, well below last year's level. "In Hungary, the Paks nuclear power plant was taken offline over the weekend after cooling-water levels from the Danube River fell to their lowest in more than four decades," says Antonia Syn from Rystad Energy. "The plant normally supplies around 40% of the country's electricity." At the same time, Norwegian pipeline maintenance is curbing supply, while a drone strike on Egypt's Damietta LNG import terminal has reduced the country's regasification capacity, tightening global LNG market conditions. (giulia.petroni@wsj.com)
1039 ET - U.K. retailer Next has shown resilience despite the challenges from the Middle East conflict, says credit research firm CreditSights, who assigns the company's bonds a 'market perform' recommendation. "We see Next as being well-placed within the BBB ratings band versus comparables," CreditSights' Mariya Nurgaziyeva says in a note. The U.S.-Iran conflict did not prevent the retailer from beating expectations and upgrading its full-year guidance, Nurgaziyeva says. (miriam.mukuru@wsj.com)
1026 ET - U.S. natural gas futures inch up in early trading. "Even though temperatures have been above average the past month, the increases in natural gas production along with maintenance backlogged in LNG demand has kept U.S. storage levels elevated," Dennis Kissler of BOK Financial says in a note. Traders are seeing the first half of August as "the last real demand time frame" with focus shifting to the milder fall temperatures, he adds. Nymex natural gas is up 0.2% at $2.688/mmBtu. (anthony.harrup@wsj.com)
1009 ET - The dollar's potential to weaken is limited even if Friday's U.S. nonfarm payrolls report is worse than expected, TD Securities strategists say in a note. "Our base case is for the DXY dollar index to still stay above its 200-day simple moving average on the 99-handle under this scenario." The dollar has fallen significantly in recent days and investors are unlikely to accumulate bets against the currency until U.S. inflation data start to soften, they say. In the case of a better-than-expected report, the dollar has more room to consolidate higher as a solid jobs report could increase expectations for U.S. interest-rate rises, they say. The DXY falls 0.1% 99.757. (renae.dyer@wsj.com)
0913 ET - Oil futures edge up as the market waits to see if an agreement is reached to reopen the Strait of Hormuz. If a deal is made to reopen the waterway, there would likely be a temporary spike in ships leaving again, "but the fact that there is less oil trapped in the Gulf than in June suggests that the exodus will be smaller, and so prices won't fall as far as they did following the first MoU agreement," David Oxley of Capital Economics says in a note. "Meanwhile, getting tankers back in to the Gulf to collect oil and LNG will be key to bringing shut-in oil production in the region back online." WTI is up 0.1% at $75.84 a barrel and Brent is up 0.9% at $80.06.
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