The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
0926 ET - The restart of the East-West pipeline in Saudi Arabia and the resumption of Red Sea oil exports has crude oil futures down 2% to $90.74 a barrel. This and oil tanker movement seen on the Strait of Hormuz are weighing on crude, although sentiment that any major developments in the U.S.-Iran conflict will wait until after November's midterm elections is expected to limit downward momentum, says Ritterbusch and Associates in a note. Brent crude falls 1.9% to $103.24 a barrel. (kirk.maltais@wsj.com)
0841 ET - A temporary policy aimed at reducing U.K. household energy costs could lower inflationary pressures and could be viewed positively by markets, Deutsche Bank economists Sanjay Raja and Maui Brennan say in a note. Such a move could reduce the need for higher interest rates by the Bank of England, the economists say. Markets price in a 79% chance of a BOE rate increase in November, and fully price in four rate hikes by July 2027, LSEG data show. (miriam.mukuru@wsj.com)
0805 ET - Oil prices retreat on signs of recovering crude exports from major Middle Eastern producers, with Brent crude below $105 a barrel. In afternoon European trading, front-month Brent futures for November are down 1% to $104.19 a barrel, while the December contract falls 1.4% to $96.49 a barrel. The U.S. oil gauge WTI is down 1.5% to $91.18 a barrel. In September, crude exports from the Gulf region reached 80% of prewar levels, according to data from Kpler. Meanwhile, Saudi Arabia resumed exporting oil via its East-West pipeline after repairing damage caused by drone strikes, pointing to an improving supply situation. "The fact that oil prices remain so high is likely due to market participants' scepticism that, given the tense atmosphere between the parties to the conflict, this high level of market supply will be sustainable," says Barbara Lambrecht, commodity analyst at Commerzbank. (giulia.petroni@wsj.com)
0548 ET - Vestas Wind Systems' third-quarter order intake looks light, according to Deutsche Bank. The bank estimates that power solutions orders are down 28% on year and 3% sequentially, based on disclosed orders so far. "While the quarter is not over, we think it's very difficult for VWS to reach consensus expectations here," analyst John Kim writes. The bank expects the Danish wind-turbine maker's third quarter to reflect a more normalized level of project execution in onshore versus the second quarter. Additionally, some offshore issues are holding back power solutions profitability. Service margins could come in at 16%, in line with management's guide for 15.5%-17.5%. Deutsche Bank retains its hold rating on the stock and lowers its target price to 205 Danish kroner from 215 kroner. Shares fall 4.4% to 190.50 kroner. (dominic.chopping@wsj.com)
0505 ET - TotalEnergies' updated strategy largely met expectations, J.P. Morgan's Matthew Lofting writes in a note. The French energy major positioned its portfolio integration and diversification as a way of capturing value throughout the cycle, and during geopolitical disruption, he says. Overall, TotalEnergies' long-term fundamentals are well placed, he adds. Shares are down 1.2% at 79.03 euros. (adam.whittaker@wsj.com)
0449 ET - Legrand's new data-center offering will be key to deliver on its growth plans, UBS analysts say in a research note. The French supplier of electrical equipment outlined its plans to transition to so-called low voltage direct current architectures to enable the next generation of AI data centers. Legrand showcased its offering at an industry fair in Singapore, which seemed credible, and the company expects to be able to take orders for the equipment in the second half of next year, UBS says. While its demonstration seemed credible, a fully commercialized offering by the end of 2027 is now key, the analysts say. Shares jump 7.6%. (adria.calatayud@wsj.com)
0433 ET - Legrand's higher merger-and-acquisition ambitions, paired with its first explicit asset-sale program, suggest the French electrical-equipment maker is taking a more active approach toward reshaping its portfolio, Jefferies analysts say. This should come as little surprise given that the company has stepped up dealmaking activity over the past couple of years, the analysts say. The company now expects deals to contribute around 5% to sales on average through the end of the decade, up from between 3% and 5% previously, and to clean up its portfolio by shedding businesses that generate between 500 million and 1 billion euros in sales. Moreover, its new sales growth targets should be taken well given that the company tends to be conservative in its guidance, the analysts add. Shares rise 6.9%. (adria.calatayud@wsj.com)
0421 ET - Legrand's upgraded targets point to strong growth in data-center sales and details on this segment look reassuring, Bernstein analysts say in a research note. The French electrical-equipment maker raised its organic sales growth guidance more than expected and it also lifted its adjusted operating margin goal, which was unanticipated given its typical conservatism, the analysts say. The new targets signal confidence in the company's data-center offering, they add. Assuming all other business area targets are unchanged, Legrand's new sales guidance implies data-center sales growth at about 15% annually, which should be taken well, according to Bernstein. Shares jump 7%. (adria.calatayud@wsj.com)
0421 ET - Eurozone government bond yields decline, taking a breather from recent steep rises as the oil-price rise slows. Eurozone bond yields are helped, on the margin, by a slightly lower-than-expected Spanish inflation data. Although flash estimate Spanish inflation for September came in at a three-and-half-year high of 5.0% this was below analyst expectations of 5.1% in The Wall Street Journal's poll. Tuesday's supply comes from the Netherlands and Italy. The 10-year German Bund yield falls 2.7 basis points to 3.619%, according to Tradeweb. Declines in peer eurozone 10-year bond yields are of a similar magnitude. Front-month Brent crude rises 0.6% to $105.89. (emese.bartha@wsj.com)
0323 ET - The polarization of trade and artificial-intelligence development between China and the U.S. is likely to continue for the foreseeable future, says Eastspring Investments in a note. The meeting between President Trump and Chinese leader Xi Jinping "delivered much pageantry, but essentially no tangible economic results," says Eastspring. The continuing divergence between the two economic powers suggests investment in China has to be centered on earnings streams supported by government policy and specific areas of local demand, Eastspring adds. Meanwhile, elevated oil prices stemming from the U.S.-Iran conflict and a potential ban on U.S. diesel exports could push diesel prices in certain parts of Asia higher, bleeding into inflation and likely pressuring regional currencies including the Korean won, Indian rupee and Thai baht, the asset manager says. (megan.cheah@wsj.com)
0313 ET - Oil prices rise as a lack of progress in U.S.-Iran talks outweighs signs of recovery in Gulf exports. In early European trading, Brent crude futures for November rise 1.7% to $107.05 a barrel, while the December contract is up 1.7% to $99.49 a barrel. The U.S. oil gauge WTI gains 1.5% to $94.01 a barrel. Saudi Arabia has resumed oil exports via its East-West pipeline after repairing drone-strike damage, restoring a key route around the Strait of Hormuz. However, steepening backwardation--when near-term oil prices exceed longer-term prices--and higher fuel prices signal persistent supply tightness. "Challenges in oil product markets show no signs of easing, with the risk of a U.S. diesel export ban looming, while Russia is preparing to extend its diesel export ban for producers by another month," analysts at ANZ say. (giulia.petroni@wsj.com)
0254 ET - Bitcoin recovers only marginally after reaching a one-week low on Monday as lingering worries over the Iran war and expectations for further U.S. interest-rate rises curtail risk sentiment. President Trump's rejection of Iran's proposal for a seven-day ceasefire lifts oil prices and strengthens inflation concerns, making the rate backdrop less supportive for bitcoin, Zaye Capital Markets analyst Naeem Aslam says in a note. Trump's later comments that the conflict could end very soon while further action remains possible leave bitcoin exposed to fast changes in geopolitical risk, he says. Bitcoin rises 0.4% to $83,873 after hitting as low as $82,516 Monday, according to LSEG. It has pulled back from the near eight-month high of $87,315 reached last week.
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