The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
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. (anthony.harrup@wsj.com)
1528 ET - U.S. natural gas futures settle higher as weekend weather forecasts added heat to the near-term outlook, favoring power-sector demand. Temperatures are still expected to fall in the second half of September, "setting up a broader shoulder-season decline in consumption," Gelber & Associates says in a note. But meanwhile reduced Canadian imports and LNG demand near 20 Bcf/d tighten the balance enough to lift October futures despite solid production, the firm adds. Nymex natural gas settles up 2.3% at $2.896/mmBtu. (anthony.harrup@wsj.com)
1357 ET - Gold futures end the session off their intraday lows as oil prices ease from highs and Treasury yields pull back after the 10-year touched 5% for the first time in three years. Gold traders are mostly focusing on this week's Fed meeting as expectations of an interest-rate hike increased following the latest payrolls and inflation data. The question for gold is whether safe-haven demand can outweigh the pressure from higher yields, GivTrade technical analyst Waleed Said says in a note. "Geopolitical uncertainty is providing structural support, while sticky inflation and the prospect of higher interest rates are preventing the safe-haven trade from translating automatically into higher gold prices." Front month gold settles down 1.3% in New York at $4,310 a troy ounce. Silver falls 1.6% to $63.513 a troy ounce. (anthony.harrup@wsj.com)
1213 ET - Diesel futures pull back from early highs as President Trump says Ukraine and Russia have agreed to stop attacks on each other's energy infrastructure. Ukrainian drone strikes that have knocked out Russian refining capacity have contributed to global diesel shortages while U.S. exports have been at record highs. "Ukraine has agreed not to hit Russian energy targets. Russia has agreed to do likewise!" Trump posted on Truth Social. He adds that the rise in diesel prices is mostly due to the Russia-Ukraine war, and not Iran. Nymex diesel futures are up 0.4% at $4.9771 a gallon. Gasoil futures on ICE Futures Europe are down 1.2% at $1,462 a metric ton. (anthony.harrup@wsj.com)
1007 ET - Dubai leads most major Gulf markets higher, with the Dubai Financial Market General Index gaining 0.6%. Saudi Arabia's Tadawul All Share Index and Abu Dhabi's benchmark index each edge up 0.1%, while Qatar's QE Index slips 0.3%. Qatar's budget deficit widened sharply to QAR21.2 billion in the second quarter as hydrocarbon revenue fell 97% on year amid the collapse in LNG exports, though the country's strong net asset position leaves it well placed to finance the shortfall, Capital Economics says. (farhan.rafid@wsj.com)
0946 ET - Yields on U.K. ten-year government bonds, or gilts, rise to their highest since 2007 while two-year gilt yields reach their highest since 2023. The moves come as rising oil prices raise inflation concerns and cause investors to ramp up expectations of the Bank of England increasing interest rates in the coming months. Brent crude price climbs 4.5% to $109.3 per barrel. Markets expect the BOE to hold rates on Thursday, but fully price four rate hikes by April 2027, LSEG data show, a notable increase from last week's pricing of two rate rises in this timeframe. Ten-year gilt yields hit a high of 5.418% while two-year gilt yields climb more than 10 basis points to 4.942%, LSEG data show. (miriam.mukuru@wsj.com)
0933 ET - The average of the Bank of Canada's preferred readings of core inflation was largely unchanged in August, near 2%. Bradley Saunders of Capital Economics says that, nevertheless, there are signs of worry that core CPI is heating up. He says the BOC's preferred core CPI gauges have recorded annualized monthly changes of 2.7% for the past two months, and now crude oil is above $100 a barrel. He adds there was "concerning strength" in some non-core items linked to shelter, travel and telecommunications. Given recent hawkish comments from Bank of Canada Governor Tiff Macklem, "it is increasingly likely that a rate hike is enacted before the year is out," Saunders says. (Paul.Vieira@wsj.com; @paulvieira)
0933 ET - Markets have raised their expectations of the Bank of England increasing interest rates in the coming months due to advancing oil prices. Brent crude price climbs 4% to $108.84 amid widening Middle East conflict after Iran-backed Houthi militants seized key territory around the Bab al-Mandeb Strait, an important shipping route for Saudi Arabia's oil exports. Investors expect the BOE to keep interest rates on hold during Thursday's policy decision, but fully price in four BOE rate increases by June 2027, LSEG data show. This is a notable increase from a week ago when investors fully priced in two BOE rate hikes by the middle of next year. (miriam.mukuru@wsj.com)
0931 ET - The sharp rise in crude oil prices this month casts a cloud over Canada's inflation report for August. Total inflation in August hit 3%, or unchanged from the prior month, and core-CPI readings were also unchanged. Royce Mendes, head of macro strategy at Desjardins Capital Markets, says BOC officials "won't take much comfort" from this data because crude oil is trading above $100 a barrel. "Persistently elevated energy prices are likely to be passed through more clearly to consumers in the coming months," Mendes says. He reckons BOC officials could be "forced into action" unless crude-oil prices retreat. (Paul.Vieira@wsj.com; @paulvieira)
0924 ET - U.S. natural gas futures gain ground as weekend weather forecasts showed summer heat lasting a little longer. "Near-term weather-driven gas demand is strong, with further backing from robust LNG," Eli Rubin of EBW Analytics says in a note. But production remains prolific, keeping winter futures prices subdued, he adds. "Winter contract weakness halted near-term upside early in September and, unless prices move higher, may continue to impede the extent of near-term Nymex upside potential." The Nymex front month is up 1.3% at $2.868/mmBtu.(anthony.harrup@wsj.com)
0903 ET - Treasury yields rise, hovering near multi-year highs, amid expectations the Fed may raise interest rates Wednesday. The conflict in the Middle East pushes oil prices up by nearly 5%, stoking inflation fears. The WSJ Dollar Index rises 0.5%, as the greenback strengthens 0.9% against the yen and 0.6% versus the euro. The 10-year yield is at 4.985% and could breach 5% for the first time since 2023, on an intraday basis. The benchmark hasn't closed above 5% since 2007. The two-year is at 4.641%, receding after reaching its highest level since July 2024.
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