The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
1237 ET - The American Soybean Association says greater small refinery exemptions for compliance with the 2025 Renewable Fuel Standard could deliver long-term damage to soybean farmers. Reports that exemptions could far exceed previous government projections would deliver "a major blow to domestic biofuel demand when U.S. soybean farmers can least afford it," the ASA says. If the EPA approves small refinery exemption petitions at levels that significantly exceed its earlier assumptions, it could eliminate around 500 million gallons of biomass-based diesel demand, costing U.S. soybean farmers around $1 billion in lost revenue, the association says.(anthony.harrup@wsj.com)
0912 ET - U.S. natural gas futures fall back after rising the previous two sessions with support from extended summer weather. "This market appears to be seeing some bearish spillover from the sharp decline in the oil complex," Ritterbusch & Associates says in a note. The possibility of another weather-driven spike higher will diminish as the October contract moves to the front of the curve this week, the firm says. The market "will require some evidence of production slippage or an increase in export activity if the sizable storage surplus is to see a meaningful reduction in the coming weeks." Nymex natural for September delivery is down 2.8% to $2.704/mmBtu. (anthony.harrup@wsj.com)
0908 ET - Yields on developed market government bonds fall as oil prices retreat following U.S. announcement of new economic sanctions on Iran. "Traders appear more focused on the potential impact on demand and the absence of a fresh physical supply shock than on the sanctions themselves," Capital.com's Daniela Hathorn says in a note. That is helping ease some of the inflation pressure that had been feeding into the recent bond selloff which took a number of major long-dated government-bond yields to multiyear highs, she says. Ten-year gilt yields fall around 5 basis points to a 12-day low of 5.004%, while the German 10-year Bund yield drops to a one-week low of 3.214%, Tradeweb data show. The 10-year Treasury yield falls 4.8 basis points to 4.656%. (miriam.mukuru@wsj.com)
0904 ET - Treasury yields fall alongside oil prices as the U.S. increases sanctions on Iran. Crude futures fall 3% and Brent trades below $90. The WSJ Dollar Index gives away overnight gains and is flat, while Bitcoin briefly jumps above $80,000, amid growing concerns that Washington will tolerate high inflation and expanding fiscal deficits. Consumer confidence data is on tap later this morning. The Treasury auctions $69 billion in two-year notes at 1 p.m. ET. The 30-year yield falls to 5.198% from an overnight high of 5.246%, the 10-year slips to 4.668% from 4.710% and the two-year drops to 4.240% from 4.255%. (paulo.trevisani@wsj.com; @ptrevisani)
0853 ET - Oil futures lose more ground with the market seeing stepped-up U.S. economic pressure on Iran more likely to lead to negotiations than military escalation. "Some signs of diplomacy out here in what is a long market and likely making it worse as Pakistan is delivering a peace offer to Iran and the U.S. is returning staff to their posts in the Middle East," Scott Shelton of TP ICAP says in a note. "The near term looks like the U.S. Treasury has bought some time for the oil market in terms of generating enough fear to end the buying for now from speculators." The New York Times reported that the U.S. is preparing to return diplomats to their posts in the Middle East. WTI is off 3.1% at $82.42 a barrel, and Brent is down 3% at $89.40 a barrel. (anthony.harrup@wsj.com)
0847 ET - Bitcoin eases back below $80,000 as its recent rally loses steam. The cryptocurrency last trades steady at $78,950, having risen to a three-month high of $81,237 overnight, LSEG data show. Bitcoin's recent gains are driven by the U.S. Treasury's announcement last week that it would increase buybacks of long-term debt along with President Trump urging lawmakers to pass the Clarity Act bill for crypto regulation. The rally from levels around $64,000 at the start of last week signals speculative liquidity is quietly returning to alternative asset classes, Tickmill Group's Patrick Munelly says in a note. While a drop in crude prices and a pause in rising Treasury yields offer brief breathing room, the structural narrative is shifting toward fiscal discipline, debt monetization, and currency debasement where investors seek alternative assets, he says. (renae.dyer@wsj.com)
0546 ET - Eurozone bond yields remain caught between higher energy prices and the limited evidence of the second-round effects required to justify the amount of tightening now embedded in market pricing, Mizuho's Evelyne Gomez-Liechti says in a note. Neither Tuesday's German Ifo data nor the German Schatz auction should materially change the broader European Central Bank debate, the multi-asset strategist says. The 10-year Bund yield falls 2.0 basis points to 3.231%, according to Tradeweb. (emese.bartha@wsj.com)
0541 ET - Oil prices extend losses, falling more than 2.5% as investors see lower supply risks from fresh U.S. sanctions than from military escalation in the Middle East. In midmorning European trade, the front-month Brent crude contract is down 2.6% to $89.72 a barrel, while WTI futures slide 2.7% to $82.67 a barrel. "With no further military escalation and some tankers slipping through after buying heavily discounted oil to compensate for the elevated transit risk, the market remains in limbo," Saxo Bank analysts say. "However, the drawn-out disruption continues to tighten the availability of crude and, not least, refined products, leaving the market vulnerable to renewed price spikes should flows deteriorate again." (giulia.petroni@wsj.com)
0538 ET - U.S. Treasury yields edge lower in European mid-morning trade while the dollar is steady as investors digest the Treasury's decision to increase long-end debt buybacks and its plan to economically isolate Iran. "Financial markets are heading into a heavy run of catalysts following their reaction to Treasury Secretary Scott Bessent's moves on long-dated Treasury buybacks and the latest sanctions against Iran," says the The Revacy Fund's Zaheer Anwari in a note. Treasury yields remain at elevated levels as markets await the next round of U.S. economic data, he says. The 10-year Treasury yield falls 1.6 basis points to 4.886%. The DXY index is stable at 99.028. (emese.bartha@wsj.com)
0530 ET - Siemens Energy is benefiting from a positive shift in investor sentiment around the stock, Bank of America analysts write. The analysts spoke to more than 60 investors about the gas turbine-maker, and noticed "a significant shift in tone." Investors are attracted by a relatively low valuation, and anticipation that the company will up its targets--even though management is typically conservative. "Significant upgrades are inevitable," they say. Hedge funds in Europe and the U.S. are sounding increasingly positive on the stock, the analysts say. Signs of higher demand would also dispel fears the group's market is oversupplied, they add. Siemens Energy shares rise 2.1%. (josephmichael.stonor@wsj.com)
0523 ET - Asian equities closed mixed Tuesday and oil dropped. Investors were cautious ahead of the Jackson Hole economic symposium as well as coming Nvidia earnings. South Korea's Kospi rebounded from earlier losses to end 0.7% higher, Hong Kong's Hang Seng Index ended flat and China's Shanghai Composite gained 0.2%. Front-month West Texas Intermediate crude oil futures fell 2.0% to $83.33 a barrel, while front-month Brent crude oil futures were 1.8% lower at $90.49 a barrel. Bitcoin topped $80,000 for the first time since May and was last 1.2% higher at $79,853.78 as fresh investor interest in the so-called debasement trade brought growing support for the cryptocurrency as a dollar hedge. Spot gold was relatively stable after the recent rally, last shedding 0.5% to $4,627.82 a troy ounce (sherry.qin@wsj.com)
0343 ET - European natural-gas prices trade above 68 euros a megawatt-hour, their highest in more than three years, as supply constraints and low storage levels continue to worry investors. Inventories across the European Union are currently 63% full, well below the five-year average of 80%. "At the current rate, it will be difficult for the EU to hit even the lower storage target of 75% ahead of the heating season," analysts at ING say. "This raises the prospects of forced buying, increasing upside risk for gas prices." In early trading, the benchmark Dutch TTF contract slips 0.2% to 68.10 euros a megawatt-hour, but is up 7% on the week.
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