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.
0446 GMT - Paladin Energy's Patterson Lake South uranium project already contributes more to Macquarie's valuation of the stock than the company's operating Langer Heinrich mine. "And with time passage and resource growth, this gap looks set to expand further," says the bank. Recent drill results have increased management's confidence in PLS resource growth, and Paladin has time to consider offtake strategies, Macquarie says. It upgrades the stock to outperform from neutral and raises its target by 7% to A$13.85/share. The stock is up 4.2% at A$11.58. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
0203 GMT - Malaysia's equity market is likely to face a confluence of external and domestic hurdles through most of 2H, Hong Leong IB analyst Jeremy Goh says in a note. Headwinds include renewed Iran war risks, hawkish Fed expectations, the KLCI expansion overhang and potential general election jitters, he says. However, these headwinds are expected to be temporary and mostly subside by the year-end, allowing the market to recover, he reckons. Hong Leong cuts its end-2026 KLCI target to 1760 from 1770. Tenaga Nasional, Sunway and CelcomDigi are among its top picks. The KLCI is 0.3% higher at 1714.02. (yingxian.wong@wsj.com)
0153 GMT - Petronas could maintain its net cash position this year and improve gross leverage, supported by higher oil prices and stronger upstream realizations, CreditSights analysts Nicole Chua and Lakshmanan R say in a note. Revenue and Ebitda are expected to rise by mid-teen percentages, while free cash flow should be aided by stable annual capital expenditure of about 50 billion ringgit, they say. Petronas' strong credit profile, state support and integrated operations should remain supportive. However, the prolonged dispute with Sarawak over petroleum and gas rights remains an overhang and could weigh on investment decisions and counterparties' confidence. CreditSights maintains a market perform recommendation and views Petronas' bonds as fairly valued versus Pertamina. (yingxian.wong@wsj.com)
1923 GMT - Oil futures rise for a third straight session as strikes between the U.S. and Iran raise concerns about further escalation and oil flows out of the Persian Gulf. The EIA reported a bigger-than-expected 4.5 million barrel draw in U.S. commercial crude oil stocks for last week, while the Department of Energy released another 3.1 million barrels from the Strategic Petroleum Reserve. The withdrawal "keeps attention on the increasingly tight market dynamics," says David Russell of TradeStation. Diesel stocks are at the lowest on record for the time of year as farmers and truckers enter their high-demand season, he adds. "Supply and demand fundamentals are taking over as government intervention loses effect and the SPR reaches critical levels." WTI settles up 0.9% at $91.01 a barrel and Brent rises 1% to $95.63. (anthony.harrup@wsj.com)
1708 GMT - Diesel prices are back on the rise as the Middle East conflict flares up, sending refining margins for the fuel to record levels. "While Iran and the logistical constraints for shipping in the Middle East are primarily in focus, the diesel narrative continues to also be written by the war in Ukraine and the destruction of Russian refinery infrastructure," says Matt Muenster, chief economist at transportation technology firm Breakthrough. While Russia bans diesel exports, the U.S. has been exporting record amounts of the fuel. "These dynamics and the expected demand growth from U.S. agricultural production through harvest season will keep diesel supported at exceptionally high prices this fall," Muenster says. "Continued pressure on diesel prices reinforces expectations that freight transportation costs will keep contributing to broader inflation across the economy." (anthony.harrup@wsj.com)
1703 GMT - Escalating hostilities between the U.S. and Iran have pushed crude prices higher, giving grain futures a boost, most notably corn. Corn is used as the main feedstock for ethanol in the U.S. which is blended into motor vehicle fuel. EIA data shows current ethanol stocks at 25.04 million barrels--11% more than this time last year, while average ethanol output is up 3.3% from the prior year and up nearly 10% from the 5-year-average. (kirk.maltais@wsj.com)
1433 GMT - High oil prices could boost energy producers' and oil-services companies' earnings, especially those companies with fairly low debt levels and controlled spending, eToro's Lale Akoner says in a note. Nonetheless, businesses in the airline industry, chemicals, and consumer businesses could be negatively affected by high energy costs and weaker demand, Akoner says. Brent crude last trades at $94.4 per barrel, having risen sharply in recent days following renewed U.S.-Iran tensions. (miriam.mukuru@wsj.com)
1302 GMT - New York Federal Reserve president John Williams says long-term bond yields are driven by the broad strength of the U.S. economy and heavy capital spending on AI. A glut of investment demand for data centers and tech infrastructure is increasing funding costs broadly, Williams tells CNBC. "It's not really about financial conditions affecting the economy, its about the economy affecting financial conditions," he says. Core inflation may be over target, but that excess is driven by high energy prices tied to conflict in the Middle East and tariffs, Williams says. (dean.seal@wsj.com)
1245 GMT - Treasury yields decline from overnight highs, mimicking oil moves as the Middle East conflict gives no signs of cooling. Crude is down less than 1%, hovering around $90. ADP says U.S. private-sector employers created 38,000 jobs in August, missing WSJ consensus of 47,000 and slowing from July's upwardly revised 46,000. New York Fed's Williams says on CNBC that it is important to bring inflation down to 2%, but stops short of committing to a September hike. The 10-year yield falls to 4.778% after rising as high as 4.815%, the highest in nearly three years, overnight. The two-year is at 4.377%, also off early highs.(paulo.trevisani@wsj.com; @ptrevisani)
1239 GMT - Oil futures are giving back overnight gains after rising this week on resumed fighting in the Middle East. The focus of U.S. strikes on reducing risks to shipping in the Strait of Hormuz "reinforces the continuation of the broad sideways path for oil prices," Samer Hasn of XS.com says in a note. President Trump said in a Truth Social post that he isn't trying to force Iran to the bargaining table. "I like our position now much better, with almost total control of the Hormuz Strait, and their economy totally collapsing," he wrote. WTI is off 0.6% at $89.65 a barrel and Brent is down 0.4% at $94.28.(anthony.harrup@wsj.com)
1104 GMT - Chevron is taking steps to more than double its production in Venezuela, planning to invest more than $7 billion in the country over the next five years. The company says Wednesday it has entered multiple agreements with the country, establishing updated terms with its joint ventures to support future investment, project development and production growth. The agreements came after President Trump last week said the U.S. reached a deal with Venezuela to secure control of a big chunk of the country's oil reserves. "With improved terms and additional acreage, we are strengthening a portfolio that we believe can deliver attractive low-cost oil growth, support energy supply and create differentiated long-term value," Chevron CEO Mike Wirth says. (connor.hart@wsj.com)
0902 GMT - BP's permanent appointment of interim chairman Ian Tyler isn't a surprise but might be seen as too conservative, AJ Bell's Dan Coatsworth says. "Tyler is more of a known quantity than his predecessor Albert Manifold, having joined BP's board nearly 18 months ago and sat in the chair's seat since Manifold's acrimonious departure in May," AJ Bell says. The appointment may be seen as too cautious, as Manifold's hiring as an outsider was to shake up the oil major. "The initial market reaction suggests Tyler's appointment hasn't sparked much in the way of excitement or disquiet, and CEO Meg O'Neill will hope it gives her the space and time to make the changes she wants at the business," Coatsworth adds. Shares are down 0.8%.
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