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.
0730 GMT - Repsol, Neste and OMV will be the main beneficiaries of sustained high refining margins, but all integrated oil companies should continue to deliver above-average profits in their downstream units, Barclays analyst Lydia Rainforth writes. Refining margins remain exceptionally tight and margins on diesel continue to accelerate, she says. Damage to refining infrastructure in the Middle East and Russia, and constrained feedstock availability for Asian and European refiners mean the backdrop remains supportive, she says. (adam.whittaker@wsj.com)
0726 GMT - Doosan Fuel Cell could return to profit next year as new contract wins boost production and ease its fixed-cost burden, says NH Investment & Securities' Y.S. Jung. The analyst expects the South Korean firm's order backlog to exceed 250 megawatts of fuel cells following its recent 501-billion-won contract with HyAxiom to supply products to U.S. data centers. Doosan could win more contracts in the U.S., with its annual production capacity expected to rise to 350 megawatts in 2027, he adds. NH upgrades its rating on the stock to buy from hold and raises its target price by 71% to 58,000 won. Shares rose 14% to close at 49,900 won. (kwanwoo.jun@wsj.com)
0718 GMT - European energy majors start the week higher as attacks on vessels in the Strait of Hormuz escalate. Brent crude is up 1.1% to $97.37 a barrel and WTI rises 1% to $86.29 a barrel after the U.S. hit three Iranian oil tankers over the weekend. "With tanker traffic increasingly exposed to direct military action and restrictions around the strait potentially widening, risks to Gulf energy exports remain elevated, keeping a substantial geopolitical premium embedded in oil prices," MUFG's Soojin Kim writes. Spain's Repsol and Italy's Eni both rise around 1.2%. In London, BP gains 0.9% and Shell rises 0.45%. (adam.whittaker@wsj.com)
0545 GMT - Energean's risk and reward profile is more attractive after share-price weakness over the year to date, Jefferies analyst Mark Wilson writes as he upgrades the rating on the stock to hold from underperform, and lifts its target price to 800 pence from 680 pence. Shares in the London-listed energy firm haven't risen as much as peers this year given the majority of its production is fixed-price gas for domestic use in Israel, he says. However, the company will benefit from revised tax assumptions and the development of the Katlan project in the Karish gas field offshore Israel, he adds. Shares closed Friday at 778.50 pence and are down 12% since the start of the year. (adam.whittaker@wsj.com)
0112 GMT - S-Oil is likely to benefit from lower official selling prices for Saudi crude, NH Investment & Securities' Y.K. Choi and S.W. Ryu say. The OSP for Asia-bound Arab light crude is set at $2 a barrel below the Oman/Dubai average for September and October after $1.5 a barrel below the average in August, continuing a longer-term downward trend, the analysts write in a note. That should help boost profit margins at the Saudi Aramco-controlled South Korean refiner, they say. The blockade of the Strait of Hormuz is prompting global oil imports to shift away from the Middle East, accelerating the region's loss of dominance in the global oil market, they add. NH raises its 2026 and 2027 operating-profit forecasts for S-Oil by 17% and 26%. (kwanwoo.jun@wsj.com)
2334 GMT - Oil rises in early Asian trade amid an escalation in the U.S.-Iran conflict that could increase supply disruptions in the Middle East. The U.S. military said it struck three Iranian oil tankers on Saturday after Iran launched ballistic missiles toward two Navy warships, as the battle to assert control over the Strait of Hormuz intensifies. "The spectre of oil flows returning to normal in the Middle East faded amid renewed attacks between the U.S. and Iran," ANZ Research analysts say in a research report. Front-month WTI crude oil futures are up 0.8% at $92.18 a barrel, while front-month Brent crude oil futures are 0.6% higher at $96.82 a barrel.
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