The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
1403 ET - Keyera can't seem to shake problems at its Alberta EnviroFuels facility, but CIBC analyst Robert Catellier says the broader outlook remains intact. "Despite the operational disruptions, KEY expects only a minimal impact to Liquids Infrastructure and reiterated all other items of its 2026 guidance," he says. Catellier notes that the latest setback at AEF comes shortly after the facility returned to full operations in early June following a five-month outage. "The relatively short period between restart and the identification of further required work is likely to renew investor concerns around AEF reliability," Catellier says. Still, the analyst says the AEF generates "outstanding returns" despite the reliability issue. Keyera is down 4.6% to C$55.76. (adriano.marchese@wsj.com)
1359 ET - The number of rigs drilling for oil in the U.S. rose by 2 this week to 449, and was up by 35 from a year ago, oil services company Baker Hughes reports. The rise in the rig count since the start of the U.S.-Iran conflict has coincided with U.S. crude production reaching record highs near 13.9 million barrels a day. The EIA projects production to increase to 14.2 million barrels a day in 2027. Rigs directed at natural gas slipped by 2 this week to 130, or 12 more than a year ago.(anthony.harrup@wsj.com)
1331 ET - Gold futures claw back some of the losses made in the wake of the 162,000 increase in August payrolls that caused short-term Treasury yields to spike and strengthened the dollar, increasing expectations for a Fed interest-rate increase this month. The market will be closely watching next week's U.S. August CPI data. "An end to the disinflationary trend seen in June and July would signal a rate hike," BankPro CEO Paolo Broccardo says in a note. But if inflation continues to slow, "this would deal a blow to the U.S. dollar and accelerate the rally in gold, Bitcoin and the S&P500." Gold for December delivery is down 1.3% in New York at $4,481.20 a troy ounce. Silver is off 1.4% at $66.74 a troy ounce. (anthony.harrup@wsj.com)
1242 ET - Oil refining margins have probably peaked and should ease over coming months as increased crude supply out of the Middle East is likely to support an increase in Chinese refinery runs, says Roukaya Ibrahim, chief commodity strategist at BCA Research. Diesel prices could see some sort of stabilization, but there won't likely be a meaningful drop until the Ukrainian attacks on Russian refineries and the Strait of Hormuz crisis are resolved, she says. Dark transits through the strait are benefiting crude more than refined products, Ibrahim notes, leaving the products market tighter than crude. "So the crack spreads will remain wide, but I think China is probably going to help on the margin." (anthony.harrup@wsj.com)
1012 ET - U.S. natural gas futures continue trending higher while alternating between gains and losses from one day to the next. The market has found support with summer heat lasting into September, while solid production and comfortable inventory levels act as a counterweight. Thursday's report of a third straight below-average weekly storage build wasn't enough to hold resistance around the $3 level. "Labor Day weekend often reveals softening spot prices," Eli Rubin of EBW Analytics says in a note. "The primary near-term market dynamic, though, remains the tussle between a deepening year-over-year South Central [storage] deficit and weak Nymex winter contracts." Nymex gas is up 1.3% at $2.952/mmBtu. (anthony.harrup@wsj.com)
0922 ET - Oil futures are lower in early U.S. trading, while remaining on track for solid gains in the week that saw a renewal of fighting in the Persian Gulf. "Markets don't proceed higher in straight-line fashion and major price up-spikes tend to be followed by occasional pullbacks," Ritterbusch & Associates says in a note. With no end of the conflict in sight and a resumption of talks still not on the radar, "we view it as premature to suggest that a price top has been established," the firm adds. WTI is off 1% at $90.38 a barrel and Brent is down 0.9% at $94.63. (anthony.harrup@wsj.com)
0852 ET - Gold futures fall following a U.S. employment report showing a much bigger-than-expected 162,000 increase in August payrolls and upward revisions to the previous two months. An easing in Treasury yields and weaker dollar had helped lift gold the previous two sessions as investors awaited the closely watched jobs numbers. Yields are up and the dollar is stronger following the report. Gold for December delivery is down 2.4% in New York at $4,429.50 a troy ounce. Silver falls 2.7% to $65.875 a troy ounce. (anthony.harrup@wsj.com)
0829 ET - Yields on long-maturity U.K. government bonds, or gilts, risk climbing further as the U.K. could face more intense inflationary pressures than its eurozone peers, RBC BlueBay Asset Management's Mark Dowding says in a note. The U.K. lacks gas storage of its own, leaving it exposed to rising energy prices, he says. The Bank of England could raise interest rates in the coming months to tackle inflation which could cause long-dated gilt yields to accelerate, Dowding says. Thirty-year gilt yields surged to 5.904% this week, the highest since 1998, LSEG data show. (miriam.mukuru@wjs.com)
0756 ET - Sterling looks vulnerable over the coming months as the U.K. is expected to face increased inflationary and fiscal pressures, RBC BlueBay Asset Management's Mark Dowding says in a note. The U.K. is exposed to greater inflationary pressure from high energy prices than its eurozone peers as it lacks gas storage facilities, Dowding says. In addition, high government borrowing costs could put further strain on public finances and hurt the economy, he says. RBC BlueBay Asset Management has an underweight position on sterling as its sees few catalysts that would support a rally in the currency over the coming months. Sterling edges up 0.1% to last trade at $1.3533. (miriam.mukuru@wsj.com)
0657 ET - Palm oil closed higher on stronger soybean oil prices and ongoing concerns about medium-term output amid El Nino weather conditions affecting Malaysia and Indonesia, says David Ng, a trader at Kuala Lumpur-based Iceberg X. Ng sees support at 4,900 ringgit a ton and resistance at 5,050 ringgit a ton. The Bursa Malaysia Derivatives contract for June delivery ended 27 ringgit higher to 4,931 ringgit a ton. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
0554 ET - The 2.5% rise in German manufacturing orders in July looks goods news but only at first glance, Commerzbank economist Marco Wagner says in a note. Excluding large orders worth more than 50 million euros, orders fell on month by 1.4%. "This means the underlying trend continues to move sideways at a low level," Wagner says. Looking at the core trend that excludes the larger orders, the recovery that had begun to take hold has once again fizzled out, he says. That means a recovery in German industrial production is unlikely for the time being, especially given low water levels in the Rhine River in recent weeks and the fact that energy prices have risen again. "The German economy will therefore recover only moderately," he says. (edward.frankl@wsj.com)
0548 ET - The Gulf's push to build new trade, energy and logistics infrastructure is likely to continue regardless of the near-term outcome of the Iran war, the Arab Gulf States Institute says. Bypassing the Strait of Hormuz is one objective, but the investment drive extends to pipelines, railways, roads, ports and new economic corridors across the region, says ASGI non-resident fellow Robert Mogielnicki. Saudi Arabia stands to benefit from a westward shift in economic activity, while the U.A.E. is developing eastern export and logistics hubs and Oman is gaining from routes that avoid regional chokepoints.
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