Global Energy Roundup: Market Talk

The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.

1011 ET - Canadian energy stocks lead the few gainers on the TSX after flare ups of fighting in the Middle East push oil prices higher. Crude oil is up 3% following U.S. strikes on Iranian rocket launch sites in the Strait of Hormuz. The higher price lifts Canada's major oil producers, with Vermilion Energy, Athabasca Oil, Strathcona Resources, Suncor and Cenovus among the top performs, rising 3.5%, 2.4%, 1.7%, 2.6% and 2.6%, respectively. The energy sector has experienced volatile trading in recent weeks as crude prices swing on shifting geopolitical tensions in the key oil-producing and exporting region. (adriano.marchese@wsj.com)

1003 ET - Gold futures are lower as U.S. strikes on Iranian targets push oil prices up, adding to the metal's losses seen Friday on Fed Chairman Kevin Warsh's inflation comments. "U.S. strikes near the Strait of Hormuz added a fresh headwind as oil rose, lifting inflation expectations," Kaynat Chainwala of Kotak Neo says in a note. "Direction from here stays tied to the Fed's rate path as further hawkish signals would extend the pullback, while a pause in yields could stabilize prices." Most active gold is off 1.3% in New York at $4,473.90 a troy ounce. Silver is down 0.9% at $67.16 a troy ounce. (anthony.harrup@wsj.com)

0928 ET - ING expects German headline inflation to rise above 3% and remain there through year-end as oil prices stay elevated. German inflation rose to 2.9% in August from 2.8% in July. Low gas-storage levels could push gas prices higher, adding to inflation early next year, ING's Carsten Brzeski says in a note. However, there is still little evidence of second-round effects from the energy shock, with core inflation steady at 2.4% and services inflation slowing to 2.8%, he says. The current environment differs from 2022, as weaker consumer demand and lower selling-price expectations limit companies' ability to pass on higher costs. ING expects the European Central Bank to raise rates in September, but sees further hikes as less certain. (don.forbes@wsj.com)

0859 ET - Treasury yields rise alongside crude prices following a U.S. military attack against Iran over the weekend. Brent is up 3%, at $91 a barrel. Markets price 64% odds of a Fed hike in September, according to CME, reacting to Chairman Warsh's hawkish statements on Friday. Economists surveyed by WSJ expect August payrolls to increase by 50,000, following July's 23,000 decrease, with unemployment steady at 4.1%. The data are due Friday. The 10-year yield reaches 4.754%, up from 4.710% overnight. The two-year rises to 4.344% from 4.232%. (paulo.trevisani@wsj.com; @ptrevisani)

0849 ET - U.S. natural gas futures are lower at the start of the week. Warmer-than-normal weather extending well into September maintains some price support, with significant near-term heat driving cooling demand. But "with normal temperatures beginning to fall quickly at this point in the season, it will take extreme anomalies to drive outsized energy demand as the calendar rolls deeper into September," Andy Huenefeld of Pinebrook Energy Advisors says in a note. Nymex natural gas is down 0.6% at $2.871/mmBtu.(anthony.harrup@wsj.com)

0815 ET - Oil futures rise after the U.S. attacked Iranian rocket launchers, renewing military action in the Persian Gulf for the first time in weeks. "The longer geopolitical uncertainty and supply disruptions continue, the tighter the market gets, keeping upward pressure on crude," Nikos Tzabouras of Tradu says in a note. But the U.S. may have limited appetite for broader military action with its shift in focus to economic measures against Tehran and its enablers, he adds. Although below prewar levels, crude is finding its way out of the Middle East and with lower consumption the market could return to balance, he adds. WTI is up 3.4% at $86.21 a barrel, and Brent is 3.1% higher at $90.85. (anthony.harrup@wsj.com)

0621 ET - U.S. Treasury yields and the dollar decline, reversing some of Friday's rises after Federal Reserve Chairman Kevin Warsh warned about inflation risks. Prospects of a Sept. 16 rate hike have increased, although investors await jobs data on Friday and inflation data next week. Rate-rise prospects and higher oil prices should support the dollar and yields, says DHF Capital S.A's Bas Kooijman. "Rising oil prices could also revive concerns about persistent inflation, placing upward pressure on yields and strengthening the dollar." The two-year Treasury yield--which rose almost 12 basis points after Warsh's speech--falls 2.3 basis points to 4.325%, according to Tradeweb. The 10-year yield falls 1 basis points to 4.710%. The DXY dollar index falls 0.2% to 99.525. (emese.bartha@wsj.com)

0552 ET - Maersk has seen a strong near-term earnings boost from more resilient freight rates, but J.P.Morgan says the current earnings and freight rate levels are unsustainable. In addition, strong near-term cash generation is unlikely to lead to material shareholder returns as capital expenditure in the shipping business will need to rise in order to halt capacity-share loss, the bank notes. Management noted that Maersk's utilization of its fleet capacity is now at 96% and that the task will be to ensure that the company has the capacity to grow. "This suggests fleet investment may need to increase," J.P.Morgan adds. The bank rates Maersk stock at underweight with a 10,000 Danish kroner target price. Shares rise 0.9% to 22,170 kroner. (dominic.chopping@wsj.com)

0533 ET - Oil prices rise as renewed fighting between the U.S. and Iran revives concerns over crude flows through the Strait of Hormuz. November Brent rises 3.4% to $91.08 a barrel, while October WTI gains 3.3% to $86.19 a barrel. U.S. forces struck Iranian missile launchers on Larak Island, prompting retaliation from Tehran and renewed fears over safe passage through the key Gulf shipping route. Recent disruptions have shown how quickly uncertainty around Hormuz can feed back into oil prices, say ING commodity strategists Warren Patterson and Ewa Manthey. (farhan.rafid@wsj.com)

0442 ET - Physical oil flow through the Strait of Hormuz rather than military escalations will determine oil prices, Phillip Nova analyst Priyanka Sachdeva says in a note. After shipping activity through the Strait has already fallen sharply, oil prices are vulnerable to sharp moves in both directions, she notes. However, if tanker traffic continues and crude flows remain relatively resilient, the geopolitical premium can fade quickly, the analyst says. "Any evidence of a sustained blockage, attacks on tankers or disruption to loading terminals would fundamentally change the equation," she adds. Front-month West Texas Intermediate crude oil futures rose 2.7% to $85.63 per barrel and front-month Brent crude oil futures added 2.7% to $90.50 a barrel. (sherry.qin@wsj.com)

0415 ET - Oil prices are likely to decline in the near term, Julius Baer's Norbert Rücker says in a note. "The chit-chat of the day is about exchange estimates of how much oil is transiting through the Strait of Hormuz," he adds. Oil exports through the strait seems to be expanding incrementally, with estimates of up to 10 million barrels a day. Oil and oil product storage also seem to be holding up much better than feared, from North America to Europe and Asia. Julius Baer expects oil prices to drop into the $70s a barrel in 2026 and into the $60s in 2027. Front-month WTI crude oil futures are 2.1% higher at $85.14 a barrel; front-month Brent crude oil futures are 2.2% higher at $90.04 a barrel. (amanda.lee@wsj.com)

0413 ET - WuXi Biologics' stronger project backlog is likely to underpin its revenue visibility, says China Galaxy International Securities' Vicky Zhu in a note. The contract research, development and manufacturing company added 169 new projects and 119 net integrated projects in 1H, while its total revenue backlog reached US$25.1 billion as of end June, she notes. The acquisition of BioDlink also contributed to the higher number of projects, she adds. She raises her 2026-2027 revenue growth estimates to around 21% and lifts her 2026-2028 earnings per share estimates by 2%-8%. China Galaxy therefore raises its target price to HK$57.82 from HK$48.62 and maintains an add rating. Shares closed 3.6% lower at HK$48.84.