Energy & Utilities Roundup: Market Talk

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.

1051 ET - U.S. Treasurys would face a fresh round of selling pressure if renewed hopes for a diplomatic breakthrough in Iran prove to be misplaced, BMO Capital Markets' Ian Lyngen says in a note. President Trump is touting a "very good meeting" between the U.S. and Iran, along with plans for another one in the near future, raising hopes that an end to the conflict could be coming, Lyngen says. But it remains unclear if any progress has been made toward a formal deal to reopen the Strait of Hormuz, he says. If talks break down, a rebound in energy prices would weigh on Treasurys, Lyngen says. (dean.seal@wsj.com)

0943 ET - Oil futures are gaining after falling the previous five sessions on optimism about oil flows out of the Middle East and renewed efforts to restart talks between the U.S. and Iran. While discussions have been held through mediators, Iran has shown little interest in direct talks, Ritterbusch & Associates says. The firm notes President Trump's comments that he expects a deal after the midterm elections and his repeated threat to annihilate Iran. "Such statements do little to sway us from a longer-term bullish stance." WTI is up 0.6% at $91.05 a barrel as the November contract debuts at the front of the curve. Brent is up 1.3% at $100.51 a barrel. (anthony.harrup@wsj.com)

0905 ET - Treasury yields rise as markets face geopolitical uncertainty and brace for interest rate increases amid a lull in economic indicators. China's Xi Jinping visits the U.S. Brent crude rises 1%, back to $100 a barrel, following President Trump's threat to escalate the war in Iran if Tehran fails to accept a deal. Hawkish Fedspeak supports bets on a sequence of hikes into 2027. The 10-year yield rises to 4.988% from yesterday's settlement of 4.966% and the two-year increases to 4.796% from 4.749%. (paulo.trevisani@wsj.com; @ptrevisani)

0250 ET - Oil prices fall in early European trading on hopes for a diplomatic solution to the Middle East war and as Saudi Arabia began efforts to restart a critical pipeline. Brent crude slips 0.9% to $98.42 a barrel, while WTI futures are down 1.4% to $89.28 a barrel. President Trump on Tuesday told reporters that U.S. and Iranian delegations had "a very good meeting." Meanwhile, Saudi Arabia is running tests on its East-West oil pipeline as flows could be restored as soon as this week. "Markets are increasingly pricing gradual de-escalation, although geopolitical developments remain fluid and vulnerable to renewed tensions," analysts at brokerage Kotak Neo say. (giulia.petroni@wsj.com)

0100 ET - Fitch Ratings expects the oil market to return to a substantial surplus in 2027. While it expects oil prices to fall next year, Fitch has raised its 2027 forecast for oil to US$70 a barrel from $65 a barrel to reflect the longer-than-anticipated Middle East conflict and the implications for the geopolitical risk premium. Analysts Brian Coulton and Alex Muscatelli acknowledge a high level of uncertainty around these projections. Assuming a deal between the U.S. and Iran takes shape in 1Q of 2027, supply and demand fundamentals could play a bigger role in determining oil prices. On the upside, geopolitical uncertainties could result in oil prices averaging $85 a barrel next year, while on the downside, a rapid recovery in supply could see prices fall to $55 a barrel, they say in a report. (monica.gupta@wsj.com)

2114 ET - Tenaga Nasional expects the Malaysian government's interim electricity subsidy for consumers for September to December to be a one-off cost, says CIMB Securities analyst Choong Chen Foong in a note. The costs stem from the government's decision to raise the threshold for electricity charges to 800 kWh a month from 600 kWh for the four months. The cost, estimated at up to 150 million ringgit, could be lower depending on fuel prices and currency movements, he says. Tenaga also says the current rules for setting electricity tariffs and its 7.3% allowed return remain unchanged, he adds. CIMB maintains a buy rating on Tenaga and keeps its target price at 15.90 ringgit. Shares are 0.3% lower at 13.06 ringgit. (yingxian.wong@wsj.com)

2029 ET - Oil falls in early Asian trade. Japan's Kyodo News Agency reported Iran proposed to reopen the Strait of Hormuz if the U.S. lifts its blockade, though Iran's Fars News Agency later cited sources denying the report. Markets will closely watch diplomatic talks between the U.S. and Iran for signs of a potential reopening of the Strait of Hormuz, ANZ Research analysts say in a note. Saudi Arabian crude exports from the Red Sea port of Yanbu are also expected to restart in the near future as state-controlled Aramco has run tests on its East-West pipeline, which was closed following an attack earlier in September. Front-month Brent crude-oil futures fall 0.75% to $98.51 a barrel, while front-month WTI is 1.0% lower at $89.59 a barrel. (amanda.lee@wsj.com)

1542 ET - Oil futures extend their losing streak to five sessions on optimism about oil flows out of the Middle East with Saudi Arabia set to restore its damaged pipeline while dark transits continue through the Strait of Hormuz. Efforts to bring the U.S. and Iran back to the negotiating table add downward pressure on prices.The restart of the East-West pipeline and increasing shipments through the strait, along with seemingly good news on the diplomatic front "is all helping to bring oil prices down," says Roukaya Ibrahim of BCA Research. WTI for October goes off the board at $94.59 a barrel, down 1.2%, and the most-active November contract falls 2% to $90.52. Brent settles down 1.1% at $99.25. (anthony.harrup@wsj.com)

1433 ET - The U.S. clean-energy industry lost nearly 37,000 jobs last year, reversing a four-year period of annual workforce expansion that followed a broader economic recovery from the Covid-19 pandemic, according to E2, a nonpartisan group of business leaders, investors and professionals who advocate for clean energy. The industry recorded job losses across 35 U.S. states and all its largest subsectors--energy efficiency, renewable power and clean vehicles, E2 says. Energy storage and grid modernization, alongside biofuels, were the only subsectors that "posted slight increases in new jobs," E2 adds. California alone lost almost 21,000 jobs, while Florida saw the largest job gains by adding roughly 3,800 positions. Clean energy represents the largest workforce in the U.S. overall energy industry, with about 3.5 million workers, compared with 958,000 in the oil-and-gas sector, according to E2.