The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
1111 ET - Qatar leads most major Gulf stock markets lower as geopolitical uncertainty continues to weigh on sentiment. Qatar's QE index falls 1.5%, while the Dubai Financial Market General Index declines 0.5% and Saudi Arabia's Tadawul All Share Index slips 0.1%. Abu Dhabi bucks the trend, with its benchmark gaining 0.3%. GCC equities are showing a cautious tone, but the divergence across markets shows that domestic fundamentals, earnings, valuations and sector-specific catalysts are also playing a growing role, says Milad Azar of XTB-MENA. Abu Dhabi's relative resilience reflects stronger domestic fundamentals, liquidity and investor confidence in large-cap banking and energy stocks, he says. (farhan.rafid@wsj.com)
1109 ET - The eurozone's 0.4% rise in second-quarter GDP shows the economy has proved more resilient than the last energy-price surge in 2022, Capital Economics' Neil Shearing says in a note. The terms-of-trade shock has been smaller than feared as the jump in global energy prices has been more modest, particularly for natural gas. Europe has also reduced dependence on fossil fuels, as imports of oil have fallen by about 10% and natural gas by around 15% compared with 2022, Shearing says. Fiscal policy is also more supportive, and households have reduced savings. Manufacturers appear to have brought forward production in the second quarter to get ahead of perceived increases in energy costs further ahead, he says. (edward.frankl@wsj.com)
1013 ET - With stock-market valuations sky-high as investors make big bets on artificial-intelligence technology, a market correction looks probable, European Central Bank economists say in a blogpost. The rally in the tech sector has brought valuations to levels last seen during the dot-com bubble, they say. "Economic research on past technological revolutions points to a worrisome conclusion: a correction of current stock-market valuations is likely." Unlike during the dot-com bubble, there is less room this time to cut interest rates or use fiscal policy to cushion the fallout, they say. A correction would have severe consequences for the eurozone through investors' direct exposure to the U.S.'s Magnificent Seven tech stocks, and the "overexuberance" in European stock markets themselves, the economists add. (edward.frankl@wsj.com)
0951 ET - The Norwegian krone has scope to rise further due the prospect of oil prices remaining elevated and the possibility of the Norges Bank raising rates again, Rabobank's Jane Foley says in a note. Speculation that the Iran war could drag on could keep oil prices high, supporting the krone given Norway's position as a major energy exporter, she says. Inflation remains above the Norges Bank's target and the central bank has raised concerns about price pressures becoming embedded in higher inflation expectations. "Consequently, another rate hike this cycle remains a risk," she says. The euro falls 0.1% to 10.9127 krone after reaching a three-week low of 10.8920 earlier, according to LSEG. Rabobank lowers its three-month target to 10.80 from 10.90 previously.(renae.dyer@wsj.com)
0939 ET - Bitcoin rises slightly as markets trim U.S. interest-rate rise expectations but the cryptocurrency continues to trade in a tight range. Bitcoin has spent the past six weeks stuck between the technical support level around $62,000 and resistance at $66,000, Trade Nation's David Morrison says in a note. This has become rather frustrating for crypto traders as the lack of volatility has lessened interest in digital assets, he says. AI-adjacent stocks, particularly semiconductors, have caught traders' attention this year at the expense of cryptos, he says. The slow progress of crypto regulation also hasn't helped, he says. Bitcoin rises 0.8% to $63,553, according to LSEG. (renae.dyer@wsj.com)
0930 ET - Euro credit spreads are likely to stay fairly stable due to strong investor demand, healthy corporate financial positions and resilient growth in the eurozone, Metzler Capital Markets' Stoyan Toshev says in a note. Credit spreads have stayed relatively steady despite volatility in stock markets and sovereign yields amid the Middle East conflict. However, a possible escalation in the U.S.-Iran war, weaker corporate earnings, or a sharp economic downturn could cause euro credit spreads to widen, he says. (miriam.mukuru@wsj.com)
0926 ET - U.S. natural gas futures are lower after weekend weather forecasts shed some near-term heat, with the demand impact offset in part by recovering LNG feedgas flows. "While buried under production and weather headlines, strengthening LNG demand--if sustained--may help natural gas find support," Eli Rubin of EBW Analytics says in a note. "Higher supply over the next few weeks and cooler weather may mark a seasonal low for Nymex gas futures before they recover in the autumn." Gas for September delivery is off 2.2% at $2.672/mmBtu.(anthony.harrup@wsj.com)
0854 ET - Oil futures are moderately higher as President Trump tells Fox News he's in no hurry to resolve the conflict with Iran. Traders also await additional U.S. economic measures against Iran. "It appears to me that the U.S. is looking to starve the Iranians as their answer to this crisis more and more," Scott Shelton of TP ICAP says in a note. That policy could make it even harder for China to keep refinery run rates at their current level and make the diesel crisis worse, he adds. WTI is up 0.7% at $83.01 a barrel and Brent is up 0.9% at $89.34. (anthony.harrup@wsj.com)
0743 ET - Subdued G-10 foreign exchange volatility looks set to persist in late August and early September, Morgan Stanley analysts say in a note. Data between now and the September Federal Reserve meeting should be consistent with the central bank keeping interest rates on hold this year, prompting markets to increasingly price out rate-rise expectations, they say. "We expect downward pressure on FX volatility given the modest longterm relationship between Fed pricing and FX volatility." Furthermore, Middle East risks could continue to be priced out ahead of the U.S. midterms, while August is historically quiet, they say. (renae.dyer@wsj.com)
0659 ET - Palm oil ended higher, as the July Malaysian Palm Oil Board report showed growth in both production and demand in origin countries, noted Nanhua Futures. Prices are likely to find some support as valuation drops, alongside its previous pullback and long-term supply contraction, they say. The Bursa Malaysia Derivatives contract for November delivery rose 12 ringgit to 4,819 ringgit a ton, according to LSEG. (tracy.qu@wsj.com)
0646 ET - Recently-released data suggest the U.K. economy is more resilient than expected, UBS Global Wealth Management's Dean Turner says in a note. Last week's GDP data showed the economy expanded by 0.4% in the second quarter, following 0.6% growth in the first quarter. Although the data show slow growth, "it is a remarkable achievement in the face of a renewed energy shock, elevated interest rates, and a revival in inflation concerns," Turner says. The data show the U.K. economy is expanding steadily, rather than facing a looming recession, he says. (miriam.mukuru@wsj.com)
0527 ET - Maersk has made faster-than-usual adjustments to its contract rates to reflect higher fuel costs, while it has increased its volumes based on spot rates, UBS analyst Cristian Nedelcu writes. Combined with persistently high freight rates, this supports higher profit forecasts, he adds. UBS forecasts 2026 Ebitda of $15.2 billion versus company guidance of $10.5 billion-$12.5 billion. The bank lifts its 2027 Ebitda forecast to $7.7 billion, reflecting higher first-quarter 2027 estimates and slightly higher peak profits next year. "While our estimates imply upside risk for another FY26 guidance increase, we believe the current high rate environment is temporary." UBS lifts its price target to 17,800 Danish kroner from 15,500 kroner and maintains its neutral rating. Shares rise 4.4% to 21,610 kroner.
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