The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
1813 ET - The daily volume of crude that Asian refineries are expected to process during this year's last quarter could be reduced by 1.4 million barrels if the Middle East conflict lasts until year end, creating profit opportunities for those businesses, according to Wood Mackenzie. Ukraine's frequent drone attacks on Russian refineries, which trimmed 3.5 million barrels of their daily crude intake last month alone, is further limiting supply of petroleum fuels, the energy-focused consulting firm says. "The scale of disruption to global crude [refining] is without modern precedent," says Alan Gelder, a Wood Mackenzie's senior vice president. He adds, however, that refiners should seize the temporary opportunity to prepare for the future. "A lower oil price environment combined with approaching peak oil demand will quickly expose the gap between competitive and uncompetitive assets." (luis.garcia@wsj.com; @lhvgarcia)
1518 ET - U.S. natural gas futures start the week lower with the market bracing for cooler late-September weather that will reduce power-sector demand. "Cooling demand is expected to step down steadily through the second half of September, making today's decline look more like a repricing of near-term weather exposure than a sharp deterioration in fundamentals," Gelber & Associates says in a note. Strong LNG demand remains the strongest counterweight to bearish weather, the firm adds. Nymex natural gas settles down 2% at $2.916/mmBtu. (anthony.harrup@wsj.com)
1512 ET - Oil futures extend their gains as the Middle East conflict escalates with Houthi attacks on Saudi infrastructure and continuing strikes in the Strait of Hormuz. "It doesn't seem like President Trump has any kind of good off-ramp here. And it feels like the Iranians despite the blockade feel they're in a good negotiating position, and so it's hard to see things getting resolved quickly," says David Grumhaus, chief investment officer at Duff & Phelps Investment Management. Also, with U.S. strategic oil reserves drawn down to low levels, those releases will have to be reduced, he adds. "I think oil is likely to remain elevated." WTI settles up 1.9% at $93.03 a barrel, a three-month high. Brent rises 0.9% to $97.92, its highest settlement since July 23. (anthony.harrup@wsj.com)
1426 ET - Gold futures settle lower as the market watches an escalation in the Middle East conflict while looking to this week's U.S. inflation data for clues on the Fed's possible interest-rate moves. "The Fed is going to matter, but we saw a pretty good dollar rally from the middle of May to late June, and we've seen the dollar come off a fair amount since then," says David Grumhaus, chief investment officer at Duff & Phelps Investment Management. "That has helped with gold this time around." An uptick in ETF flows into gold has also supported the metal, he adds. Front-month gold settles down 0.8% in New York at $4,393.90 a troy ounce. Silver rises 0.4% to $66.297 a troy ounce. (anthony.harrup@wsj.com)
1241 ET -- Qatar leads major Gulf stocks higher, with the QE Index rising 0.7%. Abu Dhabi's benchmark index advances 0.5%, the Dubai Financial Market General Index gains 0.3% and Saudi Arabia's Tadawul All Share Index edges up 0.1%. Kuwait Financial Centre Markaz says GCC equities are expected to remain driven by oil prices and regional geopolitical developments, while resilient non-oil activity and strong fiscal positions continue to support regional economies. Oil prices remain elevated after fresh attacks on Saudi energy infrastructure, with Brent nearing $100 a barrel in early European trading before retreating to around $97.80, while WTI futures also rise to about $93.76 a barrel. (farhan.rafid@wsj.com)
1038 ET - Gold futures are lower with the market watching a rise in oil prices and for U.S. inflation data later this week. "The main challenge facing gold at present is the interaction between two opposing forces," Rania Gule of XS.com says in a note. "The first is geopolitical risk, which supports demand for gold as one of the world's most important safe-haven assets. The second is the growing possibility that U.S. monetary policy will remain restrictive, increasing the opportunity cost of holding a non-yielding asset such as gold." Gold for December delivery is off 0.8% in New York at $4,440.60 a troy ounce. Silver is down 0.2% at $66.59 a troy ounce. (anthony.harrup@wsj.com)
1011 ET - Bank of America lifts its oil price estimates as strikes resume in the Persian Gulf, threatening further supply disruptions. "Renewed military tensions between the U.S. and Iran, including attacks on oil tankers, have kept uncertainty and volatility elevated," analysts at BofA Global Research say in a note. They see Brent crude averaging $83 a barrel in the second half of this year and $75 a barrel in 2027. Previously they expected Brent in a $70-$80 range in 2H26 and to average $70 in 2027.They still expect a gradual normalization of Strait of Hormuz flows, but "if skirmishes curbing oil flows continue into year-end, Brent could trade in a $95-$120/barrel range." (anthony.harrup@wsj.com)
1004 ET - Risk appetite across markets is being tested as Houthi attacks in Saudi Arabia boost crude oil prices and challenge hopes that the conflict can end soon. Instead, the continued fighting and the implementation of new tariffs on U.S. goods by Canada has investors paring back exposure to risk and volatility in assets like bitcoin. How long the risk-paring trade dominates may be linked to expectations around a potential rate hike next week from the Federal Reserve. Bitcoin falls 1.1% to $78,337, ethereum slides 1% to $2,472, and XRP is slightly up 0.1% to $1.40. (kirk.maltais@wsj.com)
0944 ET - Prediction market and exchange Kalshi says the volume of commodities-related contracts traded over the past seven months hit $400 million. That's more than four times the volume that the exchange's crypto offerings had at the same point in their lifecycle, the company says. Kalshi's commodities prediction markets include gold, silver, copper, WTI crude oil, Brent crude, gasoline, and natural gas. The exponential growth means a few things, a spokeswoman for the company says. "This trend highlights not only the huge demand for commodities prediction markets, but also the compounding power of Kalshi's platform," the spokeswoman says. (kirk.maltais@wsj.com)
0924 ET - U.S. natural gas futures are slightly lower as traders return from the Labor Day holiday and look toward the gradual loss of cooling demand. "The summer will transition rapidly into fall," Eli Rubin of EBW Analytics says in a note. Even meteorologists estimating cooling demand gains over the holiday weekend acknowledge cooler weather in the 11-15 day window, he adds. The regional breakdown for late September weather is "mildly supportive" for gas prices with late-season cooling demand in the South Central region and early heating demand in the upper Midwest and New England, he adds. Nymex natural gas is off 0.4% at $2.963/mmBtu.(anthony.harrup@wsj.com)
0853 ET - Oil futures start the U.S. trading week higher and Brent flirts with the $100 level as Iran-backed Houthis launched attacks on Saudi energy infrastructure. "A bullish trading stance still appears warranted, at least until some indication of renewed negotiations is forthcoming," Ritterbusch & Associates says in a note. The increase in shipping through the Strait of Hormuz is "likely precluding another visit in Brent to the $120 level seen early in the war," the firm says, although renewed attacks in the strait remain a risk. WTI is up 2.1% at $93.40 a barrel and Brent is 1.4% higher at $98.33. (anthony.harrup@wsj.com)
0823 ET - Germany is facing a growing gas-storage squeeze as suppliers have little financial incentive to replenish inventories ahead of winter. Storage sites are 54% full, well below the five-year average. Meanwhile, gas for immediate delivery is trading around 74 euros per megawatt-hour, while contracts for delivery later in the year are priced at just over 49 euros, according to Commerzbank. That makes it costly for suppliers to buy gas now and store it for winter. The issue is particularly important for Germany, which has around 250 terawatt-hours of storage capacity, the largest in Western Europe. "While other EU countries, such as France, regulate the economic risk faced by their suppliers, Germany continues to rely primarily on market-based incentives, which have been rendered ineffective by the negative summer-winter spread," says Norman Liebke, analyst at the bank.
Comments