The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
0713 GMT - 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)
0654 GMT - 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.(renae.dyer@wsj.com)
0653 GMT - The dollar appreciates as oil prices rise on persistent concerns over supply disruptions stemming from the Middle East conflict. The U.S. is a net oil exporter while the dollar also benefits from its safe-haven role. The prospect of the Federal Reserve raising interest further in response to price pressures brought about by the conflict is also supporting the dollar. Investors will be assessing U.S. labor market data this week to gauge the outlook for rates. The Job Openings and Labour Turnover Survey will be released at 1400 GMT while the key nonfarm payrolls report is due Friday. The DXY dollar index rises 0.1% to 101.275, close to the eight-week high of 101.398 reached Thursday. (renae.dyer@wsj.com)
0645 GMT - TotalEnergies gave near-unprecedented visibility of its growth plan, Barclays analyst Lydia Rainforth writes in a note after the French energy major's capital markets day. The plan through 2035 is supported by projects across its upstream business and growth in its integrated power unit, she says. The free cash flow growth that the plan will deliver is not reflected in the share price, she adds. The company is targeting upstream production growth of more than 3% a year to 2030 and then between 2% and 3% growth over 2031 to 2035. Shares closed Monday at 80 euros. (adam.whittaker@wsj.com)
0559 GMT - Legrand is sending a positive message on the opportunities in the data-center market with its upgraded midterm guidance and mention of potential stock buybacks ahead of an event with investors, J.P. Morgan analysts write in a note. The French electrical-equipment maker expects annual organic sales growth of 6% to 8% through 2030. Investors probably had lower expectations of around 6%, so the new guidance seems better than anticipated, JPM says. A reference to selective buybacks and more focus on portfolio pruning look positive as well, the analysts say. "We expect the company to do a solid job of addressing the relative competitive positioning in the data center space during the [capital markets day], but the important piece is that the financial guidance now backs up the narrative," the analysts add. (adria.calatayud@wsj.com)
0520 GMT - The rise in the 10-year U.S. Treasury yields to approximately 5.25% reflects higher oil prices and a strong U.S. economy more than AI debt issuance or fiscal concerns, according to Capital Economics' James Reilly. Capital Economics sees the Treasury selloff as overdone, and continues to forecast that the 10-year yield will fall this year and drop all the way to 4.25% by the end of 2027 as the Fed fails to tighten by as much as investors are discounting. "The selloff mainly seems to reflect changes in near-term expectations," he says, adding that these rate expectations have largely been driven by energy prices. The other key driver has been investors pricing in stronger U.S. economic growth and more persistent inflation. (emese.bartha@wsj.com)
0516 GMT - UBS upgrades its long-term forecast on iron ore to US$93/metric ton, from US$85/ton before. As a result, the bank raises share-price targets on miners including BHP, Rio Tinto, Vale and Fortescue. Its long-term price forecast--which is 12% above consensus--reflects a new phase for iron-ore demand, as China pivots to manufacturing and exports from construction, and steel demand from the Global South rises, UBS says. "The rise of the Global South and China's manufacturing [and] export industries should more than offset China's construction steel demand decline, resulting in global steel demand growing through 2035," it says. UBS raises its target on BHP to A$61/share from A$59/share prior. Its target on Rio Tinto increases to A$178/share from A$177/share.
Comments