The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
1012 ET - Natural gas extends a pullback it began late last week, with the shockwave from a pipeline malfunction in West Virginia easing. "With a less complicated repair job, supply flows should return to normal levels within a few days," says the Hightower Report in a note. Mild weather in the U.S. is allowing natural gas prices to ease, the firm adds. "Overall, demand for power plants is expected to pull back mildly, weighing on natural gas prices," says the firm. Natural gas prices are down 3.5% to $3.083 per mmBtu. (kirk.maltais@wsj.com)
1005 ET - Crude oil is up toward $95 a barrel as the sentiment around a potential ceasefire in the Middle East conflict has soured. "The market rebounding once again as the prospects of a deal are looking unlikely," says Scott Shelton of TP ICAP in a note. Oil prices jumped after President Trump rejected an Iranian truce proposal that would have opened the Strait of Hormuz for seven days. However, both WTI light crude oil and Brent crude have pared gains in early trading, with light crude up 1.9% to $94.19 a barrel and Brent crude up 2.1% to $106.48 a barrel. (kirk.maltais@wsj.com)
0900 ET - The global bond selloff resumes, keeping Treasury yields near multiyear highs, as hopes for an imminent solution for Hormuz and the oil trade fade away. President Trump rejects a ceasefire proposal and Iran is under pressure to return to the negotiation table. The impasse sends oil up, fanning inflation fears. The Conference Board Consumer Confidence Index is expected to be stable tomorrow, according to WSJ consensus. On Wednesday, PCE inflation is forecast to remain hot, while payrolls are expected to shrink Friday. The 10-year yield is at 5.215%, near its June 2007 high. The two-year is at 4.912%, both higher than Friday but off overnight highs. (paulo.trevisani@wsj.com; @ptrevisani)
0824 ET - Yields on U.K. government bonds, or gilts, are likely to remain high during the remainder of 2026, ending the year at 5.15%, before falling to 4.70% by the end of 2027, Morgan Stanley's Fabio Bassanin says in a note. The bank assumes energy prices will move lower by year-end, allowing markets to cut back expectations for interest-rate hikes, he says. Brent crude oil is last up 2.6% at $107.01 a barrel. Investors price in an 83% chance of the Bank of England increasing interest rates in November, and fully expect four quarter-point BOE rate increases by July 2027, LSEG data show. Ten-year gilt yields last trade at 5.393%, Tradeweb data show. (miriam.mukuru@wsj.com)
0752 ET - RWE's outperformance against peers is set to continue, underpinned by a strong balance sheet and supportive demand for power, JPMorgan analysts write. The energy company's diverse portfolio of renewables offers positive exposure to gas and power prices, commodity price volatility, and long-term contracted sources of earnings and cash flows, the analysts say. JPM has an outperform rating on the stock and 68.50 euros target price. Shares are up 0.6% at 55.19 euros, and are 27% higher year to date. (joseph.wilkins@wsj.com)
0641 ET - The dollar is unlikely to maintain its recent strong momentum unless Friday's U.S. nonfarm payrolls report is much better than expected, ING's Francesco Pesole says in a note. "While it might be too early for a break lower in oil prices, news of the U.S. and Iran working on a deal regarding the Strait of Hormuz could prevent another jump higher." That could stabilize government bonds and risk sentiment, he says. Moreover, the dollar looks expensive, according to ING's short-term valuation models. The DXY dollar index rises 0.1% to 101.101 but a pullback to 100.50 would be more coherent with fundamentals, he says. ING expects this week's jobs data to leave markets guessing about another U.S. interest-rate increase in October. (renae.dyer@wsj.com)
0628 ET - A potential U.S. diesel export ban could initially push domestic diesel prices lower, but the longer it lasts, the more likely it is to drive up prices of other refined products, according to Goldman Sachs. The bank estimates U.S. retail diesel prices could fall by around $0.25 a gallon for each week of the ban while storage capacity remains available. However, as diesel inventories approach storage limits, U.S. refiners would likely need to cut output, reducing gasoline production and pushing U.S. gasoline prices higher by around $0.30 a gallon a week. "The longer a diesel export ban lasts, the more disruptive it would likely be," analysts at Goldman say. (giulia.petroni@wsj.com)
0626 ET - The dollar could remain firm in the near term but the longer-term outlook is becoming less favorable for the currency, Societe Generale's Kit Juckes says in a note. Elevated oil prices, robust U.S. economic data and a more risk-averse global environment support the dollar, he says. Further out, November's midterm elections make it difficult for President Trump to maintain accommodative fiscal policies that have supported the economy and the dollar, he says. "The world's major savings economies are saving less than they once did, while the U.S. is having to pay more to attract the investment it needs." The DXY dollar index rises 0.1% to 101.101. (renae.dyer@wsj.com)
0626 ET - Oil prices extend gains in afternoon trading as negotiations to end the Middle East war remain stalled after Iran's proposed truce was rejected by President Trump. The front-month Brent crude contract for November, which expires on Tuesday, soars 3.9% to $108.40 a barrel, while the second-month contract trades at $100.71 a barrel. WTI futures rise 3.9% to $96.03 a barrel. "Two developments reported over the weekend carry direct implications for sentiment: media reports indicate the U.S. administration has revived its consideration of a diesel export ban, days after distancing itself from a reported 90-day plan, and that a further round of U.S.-Iran talks is expected this week," analysts at Kpler say. Meanwhile, investors are closely monitoring oil flows through the region. Kpler estimates that Middle East crude exports are currently just under 80% of pre-conflict levels. (giulia.petroni@wsj.com)
0617 ET - The cost of insuring high-yield euro credit against default rises to its highest in more than five months as market sentiment weakens due to renewed U.S.-Iran tensions. President Trump rejected Iran's plan to reopen the Strait of Hormuz, raising concerns about prolonged oil supply disruptions. Brent crude rises 3.7% to $108.18 a barrel. The iTraxx Europe Crossover index of euro high-yield credit default swaps rises 1 basis point to 298bps, the highest since April 8, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)
0605 ET - Palm oil ended lower in Asia. Malaysia's palm oil exports during the Sept. 1-25 period are estimated to be down 24% on month. Prices were likely weighed by Malaysia's sluggish export data and expectations of higher tropical oil output, Kenanga Futures analysts said in a note. The Bursa Malaysia Derivatives contract for December delivery closed 9 ringgit lower at 4,663 ringgit a ton.(amanda.lee@wsj.com)
0431 ET - Credit valuations and equity prices could face pressure under an environment of higher interest rates, Tickmill Group's Patrick Munnelly says in a note. Middle East tensions and the accelerating oil prices are causing markets to expect three or more interest-rate increases by each of the major central banks over the coming year, LSEG data show. "If energy prices remain elevated, central banks have less room to ease and more reason to keep inflation risks front and centre." Brent crude climbs 2.7% to $107.14 a barrel.
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