Global Energy Roundup: Market Talk

The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.

0946 ET - Bank of America raises its Brent price estimates citing the "exceptionally large supply disruption," that has reduced crude and refined-product availability. "Continued skirmishes into year-end are now our most likely scenario," Francisco Blanch of BofA Global Research says in a note. "Although alternative routes and escorted Hormuz shipments have mitigated some of the shortfall, damaged infrastructure and rising geopolitical tensions make rapid normalization unlikely." BofA expects Brent to average $95 a barrel in 2H26, up from the previous estimate of $83 a barrel, and raises its estimate for 2027 to $80 from $75 a barrel.(anthony.harrup@wsj.com)

0937 ET - The easing of energy prices is having little impact on the dollar as expectations for further Federal Reserve interest-rate rises support the currency, ActivTrades analyst Ricardo Evangelista says in a note. The Fed's rate rise last week, along with signals of further tightening from Fed officials, has strengthened expectations that borrowing costs could rise again before year-end, he says. Currency traders will closely follow upcoming U.S. economic data and comments from Fed officials for further clues on the path of monetary policy, he says. The DXY dollar index trades flat at 100.472, having reached a seven-week high of 100.667 earlier. (renae.dyer@wsj.com)

0916 ET - Reports of a conditional Iranian offer to reopen the Strait of Hormuz has oil falling for a fifth consecutive session, with Brent trading under $100 a barrel. The decline reflects optimism for a return to U.S.-Iran talks, although "we remain stuck in the gray state represented by a formula of neither peace nor war," says Samer Hasn of XS.com in a note. "Unless we see a serious return to negotiations between Iran and the United States involving mutual concessions, escalation prospects may remain extremely high, potentially keeping crude prices elevated for an extended period." Most active WTI is down 2% at $90.50 a barrel and Brent falls 1.4% to $98.95 a barrel. (anthony.harrup@wsj.com)

0852 ET - Treasury yields slip as oil prices fall, ahead of a $69 billion auction of two-year notes. President Trump addresses the U.N. this morning amid hopes of a diplomatic solution for the Strait of Hormuz. Crude falls 2% to stay below $100, easing inflation pressures. Markets will be watching the auction results to gauge demand for U.S. government debt as interest rate increases loom. The two-year yield trades at 4.730%, slightly lower than yesterday's settlement of 4.751%. The 10-year declines to 4.935% from 4.962%. (paulo.trevisani@wsj.com; @ptrevisani)

0731 ET - European equities indexes rise as a sharp fall in oil prices supports energy-sensitive stocks on the continent. Technology and industrial stocks rally as the Europe-wide Stoxx 600 adds 0.35%, while clothes retailers also jump. Germany's DAX reverses earlier losses to move up 0.4%. Retailers Zalando and Adidas gain 4.45% and 3.2%, respectively. The CAC 40 adds 0.5% in Paris, boosted by a recovery in luxuries. Software group Capgemini rises 1.75%. London's FTSE 100 nudges up 0.1%, with gains for consumer-facing stocks outweighing a slip in oil majors. British Airways-owner IAG adds 2.9%. Italy's FTSE MIB slips 0.2%, while the Spanish IBEX 35 gains 0.8%, boosted by a 4.2% gain for Puig Brands. The Dutch AEX gains 0.7% as AI-linked stocks gain momentum. ASML adds 0.4%.(josephmichael.stonor@wsj.com)

0652 ET - U.S. diesel prices continue to reach new highs, hitting a fresh record Tuesday as curtailed Russian exports and prolonged disruptions to crude flows in the Strait of Hormuz squeeze global supplies. The national average price of diesel rose to a record of $6.527 a gallon, according to the American Automobile Association, up sharply from $3.688 a gallon a year ago. According to a Bloomberg report, Russia is set to extend a ban on most diesel exports that was introduced earlier this year due to continued Ukrainian attacks on its refineries. "The diesel market is likely to face a challenging winter if the situation in the Middle East does not ease and Russia's ban on diesel exports remains in place for even longer," says Carsten Fritsch from Commerzbank. (giulia.petroni@wsj.com)

0653 ET - European utilities' earnings will benefit from higher-for-longer natural gas prices on the continent, Bank of America analysts write. Continuing disruption in Qatar, increased demand in Asia and low storage levels in Europe will combine to keep benchmark European natural gas prices at 55 euros a megawatt hour in 2027, the analysts say. Markets are underestimating the impact on utilities' companies EPS by around 6%-9%, the analysts say. European governments could impose lower power price caps, but levels will likely be above prices set in the 2022 energy crisis, the analysts say. SSE and RWE are both likely to deliver strong results in November, they say. A basket of European utilities stocks rise by 0.1%. (josephmichael.stonor@wsj.com)

0620 ET - European stocks linked to the buildout in artificial intelligence are undervalued compared to their American peers, UBS strategists Gerry Fowler and Sutanya Chedda write. Investors are buying U.S. AI stocks at high valuations, while leaving European suppliers building AI capacity comparatively unloved, they say. The strategists split the AI supply chain into three tiers. Tier one companies sell directly to so-called hyperscalers, while tiers two and three are at steps removed from hyperscaler spending. Companies across all three tiers will outperform the market, they say. Electricity infrastructure group Prysmian, German industrials giant Siemens and vacuum valves-producer VAT Group are all in different tiers, but will each benefit significantly from AI expansion, the strategists say.(josephmichael.stonor@wsj.com)

0617 ET - Yields on U.K. government bonds, or gilts, fall as oil prices decline following a media report that Iran offered to reopen the Strait of Hormuz. According to Japan-based Kyodo News, Iran said it would reopen the oil shipping lane if the U.S. takes the first steps toward easing military pressure. The news caused the Brent crude price to fall 2.2% to $98.14 a barrel, calming inflation concerns. Ten-year gilt yields fall 3 basis points to last trade at 5.172%, a two-week low, LSEG data show. (miriam.mukuru@wsj.com)

0613 ET - Brent crude falls below $100 a barrel on hopes for a diplomatic push to end the U.S.-Iran war. The global oil benchmark is down 1.2% to $99.11 a barrel, while the U.S. oil gauge WTI is down 2.7% to $93.20 a barrel after Japan's Kyodo News reported that Iran has proposed to reopen the Strait of Hormuz within seven days if the American blockade is lifted. "The report triggered fresh selling, as traders read it as a fresh de-escalation signal ahead of this week's U.N. General Assembly," says Kaynat Chainwala from Kotak Securities. "Until a concrete outcome emerges from this week's meetings, crude's risk premium looks vulnerable to further unwinding, though stalled talks could just as quickly reverse the move." (giulia.petroni@wsj.com)

0514 ET - The dollar briefly hits a seven-week high against a basket of currencies before paring gains as oil prices swing. Crude prices turn lower after Japan's Kyodo News said Iran offered to reopen the Strait of Hormuz within seven days if the U.S. takes steps toward easing military pressure. An earlier rise in oil prices, which reflected continuing shipping risks, had lifted the dollar due to the U.S.'s position as a net oil exporter and the currency's safe-haven role. Meanwhile, markets are betting on further U.S. interest-rate rises after the Federal Reserve raised rates by a quarter point last week and signaled further moves. The DXY dollar index rises 0.1% to 100.514 after reaching as high as 100.667 earlier. (renae.dyer@wsj.com)

0343 ET - European energy stocks post slight gains in early morning trade as oil prices halt their decline. Risks to shipping through the Strait of Hormuz remain elevated. A tanker entering the strait was struck by a projectile on Monday, according to U.K. Maritime Trade Operations. However, there remains some optimism that diplomatic efforts at the United Nations this week will help end the U.S. conflict with Iran. Brent crude futures are 1.3% higher at $101.64 a barrel, while West Texas Intermediate gains 1.3% to $97.00 a barrel. In London, Shell rises 0.8% while BP gains 0.5%. France's TotalEnergies and Norway's Equinor are around 1% higher, and Italy's Eni is up 0.8%. Spain's Repsol rises 0.6%.