The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
1532 ET - U.S. natural gas futures settle higher as the EIA reports a smaller-than-usual storage injection for last week that reduced the inventory surplus over the five-year average by 18 billion cubic feet to 167 Bcf. Underground storage rose by 15 Bcf to 3,184 Bcf, the EIA said. "The past two reports likely represent the tightest conditions of the peak summer season, with just 31 Bcf added to inventories since August 7," Andy Huenefeld of Pinebrook Energy Advisors says in a note. "The recent heat wave should keep the next two reported injections relatively modest, but inventories are expected to remain on a generally healthy trajectory." The Nymex September contract goes off the board at $2.907/mmBtu, up 2.3%.(anthony.harrup@wsj.com)
1526 ET - Oil futures snap a three-session losing streak and settle higher as the market turns its attention away from the Middle East to the Russia-Ukraine war that's heating up. "The bearish mood changed when reports emerged that Vladimir Putin had allegedly said talks with Ukraine were fruitless and that Russia was preparing to ramp up the war," Phil Flynn of the Price Futures Group says in a note. "The market is already pricing in victory on the Iranian front. The wild card now is what is happening on the Russian front." WTI settles up 1.6% at $83.53 a barrel, and Brent rises 2.1% to $89.70.(anthony.harrup@wsj.com)
1417 ET - Gold futures edge up in a steady session with the market awaiting tomorrow's comments by Fed Chairman Kevin Warsh at Jackson Hole. "A balanced tone could support gold, while hawkish remarks may lift yields and pressure the metal," Konstantinos Chrysikos of Kudo.com says in a note. "Markets will also watch any shifts in geopolitical developments in the Middle East and their impact on oil prices and inflation expectations." Front month gold settles up 0.25% at $4,609.70 a troy ounce. Silver rises 2.1% to $69.429 a troy ounce. (anthony.harrup@wsj.com)
1239 ET - Oil futures pick up after three sessions of losses that followed the U.S. tightening of sanctions on Iran and talks between Iran and Oman on opening a corridor through the Strait of Hormuz. Sanctions "tend to be rather leaky" and increasing them doesn't have much of an impact, says Christian Lawrence, head of Americas and energy market strategy at Rabobank. Sanctions against secondary countries could be more effective but in the case of Iran they would need to target China, which seems unlikely, he adds. The oil price decline is still well within recent ranges, with short-term pricing driven by headline noise, Lawrence says. "We have seen a lot more oil getting through the strait recently, but not distillates." WTI is up 0.6% at $82.69 a barrel and Brent is up 1.1% at $88.81. (anthony.harrup@wsj.com)
1133 ET - U.S. natural gas inventories posted their smallest build so far of the current injection season, reducing the surplus over the five-year average to its lowest level in two months. Gas in underground storage increased by 15 billion cubic feet last week to 3,184 Bcf, the EIA reports. The storage build was below the five-year average for the week of 33 Bcf, and smaller than the 21 Bcf estimate in a WSJ survey of analysts. Stocks were 167 Bcf above the 2012-2025 average, compared with a surplus of 185 Bcf the previous week. Nymex natural gas is up 2% at $2.898/mmBtu. (anthony.harrup@wsj.com)
1111 ET -- U.S. natural gas inventories posted their smallest build so far in the current injection season, reducing the surplus over the five-year average to its lowest level in two months. Gas in underground storage increased by 15 billion cubic feet last week to 3,184 Bcf, the EIA reports. The storage build was below the five-year average for the week of 33 Bcf, and smaller than the 21 Bcf estimate in a WSJ survey of analysts. Stocks were 167 Bcf above the 2012-2025 average, compared with a surplus of 185 Bcf the previous week. Nymex natural gas is up 2% at $2.898/mmBtu. (anthony.harrup@wsj.com)
1049 ET - Dubai leads most major Gulf stock markets higher as domestic developments provide some support against continued geopolitical uncertainty. Positive developments in tourism, investment and banking are helping investor sentiment, allowing markets to look through some of the regional uncertainty, says Mazen Abou Ismail, head of trading desk at FFA Private Bank Dubai. Still, geopolitical risk remains a key concern through oil prices and regional tensions, with domestic strength offsetting rather than eliminating the risk premium, he says. The Dubai Financial Market General Index rises 0.3%, Qatar's QE index gains 0.2% and Abu Dhabi's benchmark index adds 0.1%, while Saudi Arabia's Tadawul All Share Index slips 0.2%. (farhan.rafid@wsj.com)
1002 ET - U.S. natural gas futures are higher with the market looking to weekly storage data due at 10:30 a.m. ET. Analysts in a WSJ survey predict a 21 Bcf storage injection, which would put stocks 173 Bcf above the five-year average, down from a 185 Bcf surplus the previous week. Meanwhile, hotter weather into early September and LNG feedgas demand reaching a two-month high as Freeport and Corpus Christi return to full strength "offer a bullish bias into today's September contract final settlement," Eli Rubin of EBW Analytics says in a note. Nymex natural gas is up 2.4% at $2.911/mmBtu.(anthony.harrup@wsj.com)
0958 ET - Oil futures are higher following three days of declines, with the market watching for progress toward a reopening of the Strait of Hormuz. The pickup in prices is "underscoring how two-sided the market remains as traders balance diplomatic optimism against limited evidence of a meaningful improvement in physical flows," Kaynat Chainwala of Kotak Neo says in a note. "The path forward hinges on whether the 30- to 60-day corridor timeline holds and physical loadings actually rise, leaving prices vulnerable to sharp reversals on any setback." WTI is up 0.3% at $82.50 a barrel and Brent rises 1.1% at $88.78 a barrel. (anthony.harrup@wsj.com)
0946 ET - The Australian dollar rises to a three-month high against the U.S. dollar as foreign-exchange investors focus on seeking carry, Societe Generale's Kit Juckes says in a note. Carry is when investors borrow in low-yielding currencies to invest in higher-yielding currencies elsewhere. The Australian dollar is a popular carry target, with Australia's official cash rate standing at 4.35%. The market's current focus on carry overrides for now any concerns about weaker Chinese growth and a potential protracted shortage of oil flowing through the Strait of Hormuz, Juckes says. "The market is focusing on carry above everything else, and geopolitical selloffs may just prove to buying opportunities," he says. The Australian dollar rises 0.3% to a high of $0.7195, LSEG data show. (miriam.mukuru@wsj.com)
0856 ET - Treasury yields are little changed as the U.S. economy shows strength ahead of Fed Chairman Warsh's first Jackson Hole speech Friday. Nvidia's strong revenue growth lifts Wall Street's mood, while crude futures tick higher. Weekly jobless claims decrease to 203,000 from an upwardly revised 207,000, as layoffs remain contained. Investors expect so far cagey Warsh to clarify his approach to inflation and his view on the Treasury plan to increase long-term bond buyouts. The 10-year trades at 4.666%, slightly higher than yesterday's settle but off overnight highs. The two-year follows a similar pattern and trades at 4.228%. (paulo.trevisani@wsj.com; @ptrevisani)
0840 ET - Risk premiums around the Strait of Hormuz are easing after Oman and Iran discussed a temporary navigational corridor through the waterway and a proposed mine-clearing project, Emirates NBD says. Brent crude fell 3.9% to $88.58 a barrel following the developments, helping ease concerns over energy-driven inflation and pulling U.S. Treasury yields lower, senior economist Jeanne Walters says.
Comments