The latest Market Talks covering Energy and Utilities. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
0729 GMT - RWE's guidance will be viewed as conservative given there are several factors that could provide upside, J.P. Morgan analysts write. The German energy company's near-term guidance is based on end-of-June commodity prices, which have since moved higher, they say. Looking further ahead, RWE has flagged capacity auctions for more than 10 gigawatts due in Germany and the Netherlands that have not been baked into its 2031 guidance, the analysts say. Finally, the company said it was nearing a deal for two data centers, they say. Shares rise 0.7% to 58 euros. (adam.whittaker@wsj.com)
0716 GMT - Korea Electric Power could post weaker 3Q earnings due to higher fuel-purchase costs, says Kiwoom Securities' Cho Jae-won. The South Korean state utility is forecast to spend 6.354 trillion won on oil, coal and gas to fuel its power plants in the July-September period, up 29% on quarter and 16% on year, the analyst writes in a note. The company is also likely to face higher 3Q system margin prices, at which it purchases power from private electricity companies, Cho notes. The SMP rose to 133 won per kilowatt-hour in July and 150 won per KWh in August, from 118 won per KWh in 2Q. (kwanwoo.jun@wsj.com)
0551 GMT - RWE's second-quarter earnings are in line with July's preliminary figures, Jefferies analysts write. Overall, the German energy company's message to investors is that the long-term growth outlook is strong, they write. Management sees significant opportunities across renewables, flexible generation, storage, and grids, they add. Shares closed Wednesday at 57.62 euros.(adam.whittaker@wsj.com)
0323 GMT - China's crude oil imports are likely to recover gradually, according to BofA Securities in a research note. The country's crude oil imports fell 13% in January to July, the bank points out. "Refined-product export curbs are already easing, with our channel checks suggesting that export allowances had returned meaningfully by August, supporting higher refinery runs and crude imports," the bank says. That said, elevated inventories should also limit stockbuilding while crude prices remain high. BofA expects the full-year import-volume decline to narrow to 8%, reflecting a "meaningful but incomplete recovery". (tracy.qu@wsj.com)
0122 GMT - Oil falls in early Asian trade. U.S. crude oil inventories rose unexpectedly last week as imports increased and exports fell, according to the U.S. Energy Information Administration Wednesday. The latest data have raised doubts about the strength of U.S. demand, says Antonio Di Giacomo, a senior market analyst at XS.com, in a note. A sustained increase in commercial inventories could limit some of the momentum from geopolitical risks, particularly if it coincides with signs of slowing fuel consumption in the coming weeks, he says. Front-month crude-oil WTI futures are down 1.4% to $82.13 a barrel and Brent is down 1.3% at $87.86 a barrel.(amanda.lee@wsj.com)
0108 GMT - Macquarie raises expectations for Ampol's upcoming dividend. It now expects the Australian refiner and fuel marketer to declare an interim dividend of A$1.75/share. This "reflects a bottom-end payout of 50% (minimum allowable under Ampol's policy to which it has tended to strictly adhere)," Macquarie says. "However on review we now consider the A$340 million EG cash settlement (effectively 'buyback' component) to be over and above this." Ampol completed the A$1.165 billion acquisition of the EG Australia business at the end of June. Macquarie says the overall shareholder yield in 1H will be more like A$3.18/share, or 8%. That would be achieved while keeping gearing with the targeted 2.0-2.5X range. (david.winning@wsj.com; @dwinningWSJ)
0045 GMT - Origin Energy's share price rises 6.0% to a three-month high of 11.93 Australian dollars on a double dose of good news about its Energy Markets business. Origin reported underlying Ebitda from the division of A$1.701 billion in FY26. That was 1.3% ahead of Jefferies' forecast, and 1.5% above consensus. Origin's guidance for Energy Markets earnings in FY27 was also surprisingly strong. It projects underlying Ebitda of A$1.55 billion-A$1.85 billion, ahead of consensus forecasts of A$1.61 billion. Still, analyst Amit Kanwatia notes "the key offset remains slower wholesale markets and the extent to which lower forward prices pressure FY28 Energy Markets." Jefferies had a buy call and A$12.22/share price target on Origin ahead of its FY26 result. (david.winning@wsj.com; @dwinningWSJ)
1856 GMT - Oil futures end little changed in cautious trading with the market still focused on the Strait of Hormuz. President Trump posted on Truth Social that the U.S. is in complete control of the strait, although few ships are moving through the waterway given the risk of Iranian attacks. "I think the U.S. has significantly underestimated Iran's resolve," says Aarathi Krishnan, chief executive of geopolitical risk firm Raksha Intelligence Futures. Even if a deal is struck to reopen the strait, it doesn't mean that everything returns to normal, as the war risk premium needs to return to manageable levels, she says. "For insurers to bring down premiums they don't wait for the deal to be announced, they look for patterns over two to three months. They observe it and then they bring down risk premiums, which then makes it affordable for ships to start moving again." WTI and Brent settle up 0.1% at $83.27 and $88.98 a barrel, respectively. (anthony.harrup@wsj.com)
1747 GMT - Treasury yields partially recover from morning declines triggered by lukewarm July inflation, while the dollar strengthens. A Treasury auction of 10-year notes shows signs of steady demand. Middle East tensions remain high, but oil prices ease amid an unexpected build in U.S. crude stockpiles. Annual July CPI inflation meets forecast at 3.4%, driving odds of a September Fed hike down to 38% from 48% yesterday, according to CME. The WSJ Dollar Index rises 0.1%, reversing its morning losses. The 10-year yield rises to 4.668% from an intraday low of 4.652%. (paulo.trevisani@wsj.com; @ptrevisani)
1542 GMT--U.S. commercial crude oil stocks rose by 17.4 million barrels last week, the EIA reports, against market expectations of a small decline. Imports rose by 1.1 million barrels a day and exports were down by 627,000 b/d. "Today's numbers are very noisy because of tankers unloading in the U.S., but they don't alter the challenging fundamental picture," David Russell of TradeStation says in a note. "Markets will likely look past this report and keep focusing on headlines out of the Middle East." WTI and Brent are virtually unchanged at $83.20 and $88.92 a barrel, respectively. (anthony.harrup@wsj.com)
1326 GMT - Oil futures are lower in early U.S. trading with little movement seen toward an agreement to reopen the Strait of Hormuz. The IEA says it now expects global oil demand to fall by 1.6 million barrels a day this year, more than the 1 million b/d drop it previously expected. With supply seen falling by 4.3 million b/d, it still implies further global inventory draws as this year proceeds, Ritterbusch & Associates says in a note. Given uncertainty over the Iran war and the Strait of Hormuz, the forecasts "don't carry the weight that they would under normal market conditions," the firm adds. WTI is off 0.5% at $82.78 a barrel and Brent is down 0.6% at $88.36. (anthony.harrup@wsj.com)
0939 GMT - E.ON's first-half Ebitda and net income results are broadly in line with expectations, JPMorgan analysts write. The call with management later Wednesday will likely focus on regulatory changes and legislative developments in both the European Union and Germany, they say. Shares in the German energy company fall 0.9% to 18.85 euros.
Comments