Global Energy Roundup: Market Talk

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

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)

1604 ET - Natural gas futures post their biggest one-day gain in six weeks, settling up 4.5% at $2.965/mmBtu. Lower expectations for end-of-season storage levels following a string of below-average injections could be behind the rise, which is also "partly due to a short-covering rally as bears are overweight via commitment of traders and rushed to exit when prices worked against them," NatGasWeather.com says in a note. Numerous bearish factors remain, including a near-term seasonal decline in weather-driver demand and a strong El Niño weather pattern "with many forecasts predicting a warmer-than-normal winter across the northern U.S.," the forecaster adds. (anthony.harrup@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)

1522 ET - Demand for air travel appears to remain strong, despite a lingering headwind from fuel prices, Morgan Stanley analysts write in a note, recapping day 2 of the bank's annual Laguna conference. United, Southwest, Allegiant, and Frontier all reported strong travel demand or said they saw no signs of softness in the market, even as the cost of fuel drives up ticket prices. Still, the cost of fuel continues to create uncertainty for most of the industry. The analysts write that consistently elevated fuel costs could prove a headwind for JetBlue's path to profitability and prompt airlines across the board to reduce capacity. (elias.schisgall@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. (luis.garcia@wsj.com; @lhvgarcia)

1410 ET - Gold futures settle modestly lower as the U.S. dollar firms and yields edge up, while finding some support in lower oil prices that if sustained could ease inflation pressures. Front-month gold for September delivery settles down 0.2% in New York at $4,338.90 a troy ounce, while silver gains 0.2% to $65.932 a troy ounce. The precious metals "remain within what appears to be a solid support range," Peter Cardillo of Spartan Capital says in a note. (anthony.harrup@wsj.com)

1250 ET - The former head of fixed-income powerhouse Pimco says the first thing he looks at in the morning is diesel. Mohamed El-Erian made the comments on CNBC as the price of diesel, the lifeblood of so many economic sectors, hits records daily. El-Erian, now chief economic adviser at Allianz, says the main problem for the U.S. economy is supply side, particularly energy, and investors need to stop pushing central banks saying "you're the only game in town." He thinks effective remedies lie with other policymakers that address the supply side, such as reducing sensitivity to choke-point areas like the Strait of Hormuz. On the demand side he says reducing debt burdens and budget deficits is a must. Without these things, the Fed could sacrifice the real economy just to quell Wall Street's expectations. (patrick.sheridan@wsj.com)

1045 ET - U.S. natural gas futures are recovering much of yesterday's losses as softening production readings and a pickup in LNG feedgas help offset declining weather-driven demand. "The arrival of the shoulder season, fading weather support, and strengthening injections are muzzling attempted upside runs from earlier in September," Eli Rubin of EBW Analytics says in a note. A still hot Texas and strong physical market is sustaining support for now, but rising storage injections, and a weak fundamental winter outlook "suggest November may face challenges when it becomes the Nymex front-month contract next week," Rubin adds. The October contract is up 1.8% at $2.887/mmBtu. (anthony.harrup@wsj.com)

1023 ET - European natural-gas prices fall in afternoon trading, but downward pressure is likely to be limited. "This is because, unlike the oil market, there are no alternative routes on the gas market through which the currently missing LNG from Qatar could be transported," says Norman Liebke from Commerzbank. "As long as the Strait of Hormuz remains officially closed, only a small portion of Qatari LNG is reaching the global market." The squeeze comes as European storage levels remain well below the five-year average ahead of the heating season. Meanwhile, the European Commission's Gas Coordination Group is due to discuss the market situation on Thursday. The benchmark Dutch TTF contract is down 2.5% at 71.44 euros a megawatt-hour. (giulia.petroni@wsj.com)

1015 ET - Oil prices continue to trade lower, with Brent crude below $100 a barrel on hopes for improved Gulf supply. The global oil benchmark is down 1% at $99.34 a barrel, while front-month WTI futures fall 1% to $94.80 a barrel. "The decline reflects market expectations of increased oil supply," says Giovanni Staunovo from UBS. "Time will tell whether those expectations prove overly optimistic." Meanwhile, Saudi Arabia's crude exports from the Red Sea port of Yanbu could restart within a couple of days as state-controlled Aramco runs tests on its East-West pipeline, The Wall Street Journal reported earlier on Tuesday. (giulia.petroni@wsj.com)

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.