The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
2018 ET - Oil rises in Asian trade. Crude prices remain volatile as markets react to developments in the Middle East, says Infinox's Thadeu Dos Santos in commentary. The U.S. military said its forces fired on a Panama-flagged ship that attempted to run the American blockade of Iranian ports early Tuesday, the Wall Street Journal reported.Crude oil price volatility is likely to remain elevated without a concrete breakthough in diplomacy in the region, says the Infinox regional director. Front-month crude-oil WTI futures rise 0.55% to $83.66 a barrel; Brent gains 0.5% to $89.36 a barrel.(megan.cheah@wsj.com)
1959 ET - Austal's Australasian business should have an attractive valuation if it completes the sale of its U.S. operations to South Korean conglomerate Hanwha, which has bid up to $1.2 billion including debt. That's according to Macquarie, which estimates an enterprise value-to-EBIT multiple of 4.9-8.4x for the military shipbuilder's Australasian business. It says this multiple looks favorable compared with a global peer group average of 15x. "Our calculations are based off Austal's forecast A$62 million FY26 EBIT, noting the segment should grow strongly over the medium-term as construction of the Medium and Heavy Landing Craft programs ramp-up from the end of 1H27," Macquarie says. It has an outperform call on Austal. (david.winning@wsj.com; @dwinningWSJ)
1951 ET - New Zealand-based fuel importer Channel Infrastructure loses a bullish rating from Macquarie, which says its downgrade to neutral from outperform is driven by valuation and not a change in the investment case. "Channel Infrastructure remains a high-quality strategic infrastructure asset, underpinned by defensive contracted earnings and valuable Marsden Point growth optionality," says Macquarie. However, the stock has been on a year-long rally, fanned recently by the Middle East conflict which has spotlighted the importance of local fuel storage. "Further upside exists, but execution must catch up after a strong re-rating," Macquarie says. The stock is up 0.6% at 8.25 New Zealand dollars, versus NZ$2.12 a year ago. (david.winning@wsj.com; @dwinningWSJ)
CoreWeave expects to end the year with upwards of 1.85 gigawatts of active power, up from a previous outlook of 1.7GW, CFO Nitin Agrawal says. That also translates to heavy capital spending, with third-quarter capital expenditures expected between $11.5 billion and $13.5 billion, "based on the significant amount of new capacity we will be delivering to customers," Agrawal says. CoreWeave also lifts its full-year CapEx guidance to between $35 billion and $39 billion. The boosted CapEx guidance doesn't deter investors, with shares up 13% after-hours. (elias.schisgall@wsj.com)
1626 ET - Diesel futures rise as markets remain unconvinced of a near-term solution to supply disruptions in the Middle East. "The Chinese import slowdown is really solving a big portion of the crude problem," says Rabobank's Joe DeLaura. But that means Chinese refineries are running at slower rates, which along with stepped up Ukrainian attacks on Russian refineries is creating a big shortage. "Diesel markets are going completely parabolic because there's not enough product and diesel has basically no demand elasticity. There is no price which you will not pay for diesel because it keeps your business running," DeLaura says. Nymex diesel settles up 1.5%, at $4.2525 a gallon, and ICE gasoil rises 1.5%, to $1,324.51 a metric ton, ahead of tomorrow's August contract expiration. (anthony.harrup@wsj.com)
1505 ET - U.S. natural gas futures give back some of the previous day's gains. Soft LNG demand and comfortable storage levels have kept a lid on attempted rallies, despite high power-sector demand driven by hot summer weather. In its latest monthly outlook, the EIA said it expects natural gas storage to end October at 3,985 Bcf, entering the winter at its highest level since 2016. "With high storage heading into winter, we expect the Henry Hub spot price will remain below $3/mmBtu until November and average $3.03/mmBtu over the remaining five months of the year," the EIA said. Nymex natural gas settles down 1% at $2.767/mmBtu. (anthony.harrup@wsj.com)
1500 ET - Oil futures extend their rally with Brent rising for a fifth straight session as the market reconsiders reports of progress toward an agreement to reopen the Strait of Hormuz. A dip into negative territory after a Pakistani official said the U.S. and Iran were close to some sort of arrangement was short-lived. Iran's naming of hardliners to top security positions doesn't bode well for negotiations, Mizuho's Robert Yawger says in a note. "The new appointees do not strike me as the type of people who will be willing to compromise on any of the issues that need to be resolved for a genuine peace to emerge," he says. Brent settles up 1.4% at $88.91 a barrel after hitting $90 earlier in the session. WTI rises 1.3% to $83.20 a barrel.(anthony.harrup@wsj.com)
1348 ET - The EIA's next report on U.S. ethanol estimates is expected to show a small decline in average daily production. Analysts surveyed by Dow Jones see production landing anywhere from 1.087 million barrels a day to 1.115 million barrels a day. That's versus last week's average of 1.107 million barrels a day. Forecasted inventories are expected to land within 24.29 million barrels and 25.22 million barrels. Most-active CBOT corn is down 0.4%. (kirk.maltais@wsj.com)
1237 ET - Oil futures are moderately higher with the market cautiously awaiting signs of an agreement to reopen the Strait of Hormuz. Despite reports of progress in talks, "I think there are still some very fundamental differences between the U.S. and Iran and everything they're trying to negotiate," Rabobank senior energy strategist Joe DeLaura says. "Both sides don't want to back down and there's no incentive for either one to back down." Options for the U.S. between total escalation and withdrawal are both bad, he adds. WTI is up 1.1% at $83.04 a barrel and Brent is up 0.9% at $88.48. (anthony.harrup@wsj.com)
1109 ET - Expanding AI data centers have a growing impact on municipal bond markets, spurring issuance while presenting new risks, LPL Financial's Lawrence Gillum and Brian Booe say in a note. Power-hungry data centers require grid upgrades, leading to an increase of more than 25% in electric power issuance so far this year. "The gas prepayment sector, long a niche, has grown to more than 5% of the municipal index with roughly $100 billion outstanding," Gillum and Booe say. Host communities can benefit from an increased tax base. However, backlash against higher utility bills associated with data centers represents a risk, they say. (paulo.trevisani@wsj.com; @ptrevisani)
1006 ET - U.S. natural gas futures are holding on to the previous session's gains made on a hotter near-term weather outlook. "Expectations for stronger consumption in the coming weeks, along with a recovery in LNG feedgas demand, have helped offset an uptick in domestic production and lift prices from recent lows," Andy Huenefeld of Pinebrook Energy Advisors says in a note. While the Midwest and Northeast will likely cool down in coming days, lingering heat across the south should support demand from power generators well into August, he adds. Nymex natural gas is steady at $2.794/mmBtu.(anthony.harrup@wsj.com)
0941 ET - Oil futures move lower after Pakistan's defense minister tells Bloomberg that the U.S. and Iran are nearing some sort of agreement. Yemen's Houthis continue attacks on shipping in the Red Sea and the U.S. fired on a ship attempting to evade its blockade of Iranian ports. "It seems the details of a peace deal have become more complicated with Iran demanding the U.S. repay for war damages, and President Trump countering, stating Iran should make financial compensation to the people they have harmed in the past including their own citizens," Dennis Kissler of BOK Financial says in a note. "The reality remains that the Strait of Hormuz traffic remains extremely light, and global fuel supplies (especially diesel) are tightening further." WTI is off 0.6% at $81.62 a barrel and Brent is down 0.8% at $87.02.
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