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.
1153 ET - Enbridge $2.55 billion Tallgrass crude asset purchase is a "logical extension of ENB'S Liquids Pipelines franchise," says CIBC's Robert Catellier. The analyst says that the transaction adds "highly contracted infrastructure" that complements Express-Platte while expanding the energy company's Rockies footprint to optimize light and heavy crude flows across its broader network "including shifting light barrels onto Express-Platte/Pony Express [crude oil pipelines] and preserving Mainline capacity for heavier Canadian barrels." CIBC raises its price target on the stock by C$1 to C$79. Shares are up 0.9% to C$67.62. (adriano.marchese@wsj.com)
0850 ET - Oil futures are higher in early U.S. trading amid market pessimism about flows out of the Middle East following the outage of a key Saudi pipeline and the increased Houthi threat to Red Sea shipping. "With Hormuz, the Saudi bypass and Bab al-Mandeb all simultaneously exposed, the market is pricing a broader loss of route flexibility, not just a supply shock," Kaynat Chainwala of Kotak Neo says in a note. "Unless there's a credible diplomatic breakthrough, the risk premium looks set to stay elevated." WTI is up 1.6% at $103..00 a barrel and Brent rises 1% at $106.75. (anthony.harrup@wsj.com)
0333 ET - European oil stocks are mixed at the open despite oil posting gains as traders assess the impact of lost Saudi Arabian volumes after the attack on the country's East-West pipeline. Tightening supplies push Brent crude up 2% to $107.70 a barrel and WTI 2% higher at $103.37 a barrel. Such oil-price gains have tended to push oil stocks higher since the conflict with Iran began. However, only Spain's Repsol records a notable gain, rising 1.5%. Italy's Eni rises 0.4%. Britain's BP falls 0.3% while Shell trades flat. Broader economic sentiment has weakened in recent days following mounting warnings over an AI slowdown and 10-year Treasury yields hitting 5% for the first time since October 2023. (adam.whittaker@wsj.com)
0257 ET - Oil prices continue to rise early Tuesday as traders assess the impact of lost Saudi Arabian volumes after the attack on the country's East-West pipeline. In European trade, Brent rises 1.75% to $107.50 a barrel while WTI is up 1.8% at $103.17 a barrel. The true extent of the damage hasn't been confirmed and the immediate impact on oil markets depends on how much oil can be taken from storage at the Yanbu port facility, ANZ analysts write. The Kingdom is expected to ramp up shipments through the Strait of Hormuz but recorded traffic remains very low, they say. Buffers, such as oil stored on the water in large ships or on land in strategic reserves, are disappearing and further tightening immediate supplies.(adam.whittaker@wsj.com)
0112 ET - Amid rising uncertainty, the question of what to buy looks a little hazy. The answer is probably less of what depends on cheap money, and more of what generates cash today, says Ipek Ozkardeskaya, a senior analyst at Swissquote. Energy and mining companies remain interesting in a world of expensive commodities and persistent inflation, while companies with low leverage should weather higher borrowing costs, she says. If AI becomes less about building the next gigantic model and more about monetizing what already exists, the next opportunity may lie with the users of AI rather than its builders, she adds. (james.glynn@wsj.com; X @JamesGlynnWSJ)
2320 ET - SK Innovation is expected to improve its financial health in 2026 on sharply higher earnings, Yuanta Securities Korea's Hwang Kyu-won and Seo Seok-jun say. The analysts expect the South Korean energy company's operating profit to surge to 10 trillion won this year from 448.7 billion won a year earlier. Its oil-refining and lubricant businesses are driving the expected surge in earnings, with profit margins widening amid global oil supply disruptions caused by the prolonged wars in Iran and Ukraine, they note. Yuanta expects SK's operating cash flow to reach 4.5 trillion won in 2026, with free cash flow turning positive after years in negative territory. Yuanta expects SK's consolidated net debt to fall to 20 trillion won in 2026 from 24 trillion won in 2025. (kwanwoo.jun@wsj.com)
2030 ET - Oil gains in early Asian trade. Stabilizers in the global oil market appear to be weakening with China's crude oil imports edging higher and non-OPEC+ supply outside the Middle East likely to only come online in 2027, says Commonwealth Bank of Australia's Vivek Dhar in a note. Dhar finds it difficult to predict when oil flows in the Strait of Hormuz--through which one-fifth of the world's oil typically passes--will recover materially, given still-elevated U.S.-Iran tensions. CBA's low estimate of global markets having five to 11 weeks of oil and refined product stockpiles is growing more likely, the strategist adds. Front-month WTI crude-oil futures are up 1.3% at $102.69 a barrel, while front-month Brent is 1.3% higher at $107.01 a barrel. (megan.cheah@wsj.com)
1552 ET - Oil futures settle higher as Saudi Arabia's pipeline outage and Houthi advances in Yemen keep the market's concerns about supply disruptions intact. Prices fell back from early highs, led by diesel, after President Trump said Ukraine and Russia agreed to stop attacks on each other's energy facilities. But "neither country has independently said they are held to the deal," Mizuho's Robert Yawger says in a note. And "as far as I know, there is no dialogue between the U.S. and Iran," he adds. WTI settles up 1.3% at $101.39 a barrel and Brent rises 1% to $105.68.
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