The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
1016 ET - Oil futures are higher as Houthi strikes on Saudi targets, attacks on shipping in the Strait of Hormuz and continuing Russia-Ukraine strikes keep the market on edge despite the amount of oil making it out of the Persian Gulf. "Traders will remain focused on oil flows coming out of the Middle East along with diesel supplies that are supposedly moving from Russia," Dennis Kissler of BOK Financial says in a note. "Near-term futures seem to be pricing in a higher probability of a major military conflict coming back to the Middle East." WTI is up 1.3% at $95.40 a barrel and Brent gains 0.2% to $105.91 a barrel. (anthony.harrup@wsj.com)
1002 ET - Inflation is still gas-powered right now, but the pressures are filtering into other categories, including apparel and autos, LPL Financial's Jeffrey Roach says in a note. Gas prices rose 9.1% in September, which accounted for more than half of the monthly increase in consumer prices, he says. But that category is highly volatile and can reverse quickly, the economist says. Core inflation meanwhile rose 0.3%, pushing the annual rate up to 2.6% from 2.4% the prior month. That core measure needs to consistently run in the 0.1% to 0.2% range before markets can conclude that inflation pressures are contained, Roach says. (dean.seal@wsj.com)
0900 ET - Gold futures extend early losses after September core U.S. CPI comes in higher than expected, pushing up yields and the U.S. dollar. Factors behind dollar gains include geopolitical developments on the war front and the IMF chief saying U.S. Treasury Secretary Scott Bessent's growth plans aren't enough to tame surging deficits and the mounting debt pile, Peter Cardillo of Spartan Capital says in a note. "Ironically, these concerns provide another reason to buy precious metals." Gold for December delivery is down 1.2% in New York at $4,126.50 a troy ounce. Silver falls 2.7% to $57.92 a troy ounce. (anthony.harrup@wsj.com)
0751 ET - Enerflex is accelerating its pivot into high-growth data center infrastructure, leveraging two major behind-the-meter natural gas power awards. RBC's Keith Mackey says, "Enerflex continues to demonstrate strong execution in BTM power generation, with its backlog now exceeding 1.75GW." The analyst notes that the projects have capital-efficient deal structures where clients supply the primary generator engines, while Enerflex handles modular design and fabrication. Mackey estimates that the 1.75GW backlog maps to about $1.9 billion in prospective revenue and $366 million in gross margins. With this, he expects that the earnings stream should "comfortably exceed the $100 million incremental facility capital investment Enerflex has announced." (adriano.marchese@wsj.com)
0502 ET - Morgan Stanley raised its price forecast for Dated Brent--which reflects oil for actual physical delivery--by $5 a barrel, citing record-high tanker freight costs that are supporting prices despite a recovery in Gulf oil exports. Although Middle Eastern crude exports have recently rebounded, total supply from affected Gulf countries and Russia remains 5.5 million barrels a day below last year's levels, according to the bank. Low inventories and heightened geopolitical risks are adding further support. Meanwhile, tanker rates have surged as longer shipping routes, ship-to-ship transfers and sanctions restrict available capacity. Morgan now sees Dated Brent at $105 in the fourth quarter of this year and at $100 in the first quarter of 2027. (giulia.petroni@wsj.com)
0445 ET - Saudi Arabian and U.A.E. chemical producers face a test of their ability to redirect exports as disruptions to shipping through the Strait of Hormuz continue, S&P Global Ratings says. Company results should provide evidence of how effectively producers have used alternative routes despite logistical constraints, according to the ratings firm. Solid chemical products are generally easier to store or reroute than liquids, which require specialized storage and transportation infrastructure. S&P says the conflict has disrupted regional chemical exports and production, making geographic diversification an important factor in companies' credit resilience. (farhan.rafid@wsj.com)
0434 ET - Oil prices are mixed after Yemen's Houthi militants struck a building at the headquarters of Saudi Arabia's state oil giant Aramco, while a series of attacks against shipping in the Strait of Hormuz continues to keep the geopolitical risk premium high. "According to data from the UK Maritime Trade Operations, 24 ships were hit in the two weeks to Oct. 11," analysts at ANZ say. "The next most intense period of attacks was during the first two weeks of March." In early European trading, Brent crude is down 0.1% at $105.65 a barrel, while WTI futures are up 0.1% at $94.23 a barrel. Meanwhile, the latest Chinese data showed total crude imports fell 21% on year in September, while refined products were down more than 53%. (giulia.petroni@wsj.com)
0422 ET - Iberdrola should post solid third-quarter results that offer a strong basis to upgrade its guidance, J.P. Morgan analyst Javier Garrido writes. The Spanish renewable energy company benefits from capital-expenditure led growth and strong volumes in its generation and supply division, he writes. It should increase its 2026 adjusted net income guidance to at least 6.8 billion euros, he adds. Shares trade flat at 21.54 euros. (adam.whittaker@wsj.com)
0233 ET - Pan Ocean could post a 3Q earnings beat on robust market conditions for bulk carriers and tankers, iM Securities' Bae Se-ho says. The analyst expects the South Korean shipping company's operating profit to have jumped 55% from a year earlier to 194 billion won for the July-September quarter, above the market consensus estimate of 184 billion won. Higher iron ore shipments from China and Brazil as well as rising tanker freight rates amid Middle East conflicts likely boosted Pan Ocean's 3Q earnings, Bae says. He is also positive about the company's expanding fleet of very large crude carriers, citing surging VLCC freight rates amid the conflicts. He raises his earnings-per-share estimate for Pan Ocean by 9% this year. (kwanwoo.jun@wsj.com)
0201 ET - Geopolitics and AI remain the main drivers of the market, Jefferies' Mohit Kumar says in a note. There seems to be little progress on the geopolitical front, with a deal between the U.S. and Iran looking less likely before the U.S. midterm elections, the global economist says. "We have been in the optimistic camp, but have to admit that chances of even a fudge look low," he says. Jefferies sees a risk that U.S. President Trump launches another bombing campaign after the mid-terms, with the potential for another round of escalation, Kumar says. (emese.bartha@wsj.com)
0129 ET - Iberdrola's third-quarter EPS should grow by around 6% on year due to a strong performance across its regulated businesses, Jefferies Ahmed Farman writes. Group adjusted Ebitda is seen reaching 3.7 billion euros, driven by an around 13% growth in its networks unit, he adds. Jefferies also increases their net income forecasts through 2029 by roughly 3% on average. This reflects the incorporation of Finnish firm Caruna and updated assumptions, he says. The Spanish renewable company could raise its full-year guidance but this is already reflected in the stock, meaning any upgrade is unlikely to be a catalyst for the shares, he says. (adam.whittaker@wsj.com)
0118 ET - British energy major BP should be able to set out its capital allocation policy now that it has met its net debt target, HSBC'S Kim Fustier writes. With a strategy update slated for December, management's priority will remain firmly focused on deleveraging, she says. HSBC sees stable capital expenditure and no return of the quarterly buyback before 2028. BP's total liabilities are seen at $34 billion at the end of 2026 and around $16 billion at end the end 2027, she writes.
Comments