The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
1231 ET [Dow Jones]--The EU's recent trade talks with China, which saw both sides agree to an annual cap on Chinese hybrid and plug-in hybrid vehicles entering the bloc and lower tariffs on EU goods like olive oil and car parts shipped to China, could be a stepping stone to look at addressing trade imbalances in other sectors, Helen McEntee, Ireland's trade minister, says at a meeting in Dublin Friday. She says that the EU has made progress in its trade relationship with China, "albeit in a limited way on certain industries and certain types of products," she says. "I would see that as a platform and perhaps a stepping stone to look to more industries and sectors where we can address that imbalance," she says. (edith.hancock@wsj.com)
1215 ET - Silver futures are falling for a third straight session, trading at their lowest level in almost a year, while gold is lower and hovering just above the $4,000 mark. The recent Nasdaq rout is weighing heavily on precious metals, Peter Cardillo of Spartan Capital says in a note. "We see two main factors: first, investors are raising cash; second, Russia is selling gold holdings as the war continues to leave its economy in shambles," he says. "Nonetheless, while the risk of further downside remains, we would selectively buy at these levels." Silver for December delivery is off 1.4% in New York at $54.225 a troy ounce. Gold is down 1.2% at $4,010.20 a troy ounce. (anthony.harrup@wsj.com)
1054 ET - U.S. natural gas futures are lower as weather forecasts shed more near-term heating demand. "With warmer overnight trends, the weather data maintains a solidly bearish pattern for most of the next 15 days," NatGasWeather.com says in a note. The first week of November is "very El Niño-like" with warmer-than-normal temperatures over most of the northern 2/3 of the U.S., the forecaster says. "Clearly, the longer it takes for colder/bluer weather maps to show up in the weather models, the more impatient the natural gas markets are likely to get waiting." Nymex natural gas is down 3.3% at $2.703/mmBtu.(anthony.harrup@wsj.com)
1024 ET - Gold prices trade just above $4,000 a troy ounce, on track for a weekly loss of nearly 4% as rising oil prices fuel concerns over inflation and rate hikes. In early U.S. trading, futures in New York are down 0.9% to $4,022.80 an ounce. "The latest price action suggests that short-term speculative selling is currently outweighing demand from longer-term investors," analysts at Saxo Bank say. "A sustained recovery will likely require stabilising energy prices, continued demand from central banks and ETF investors, and, not least, evidence that the recent wave of long liquidation has run its course." (giulia.petroni@wsj.com)
0948 ET - Increased geopolitical risk premium explains the oil market's ability to shrug off the increased flows through the Strait of Hormuz, with Middle East tension, the Russia-Ukraine war, and stepped-up Houthi attacks on Saudi infrastructure posing threats to global supply in various regions, Ritterbusch & Associates says in a note. The firm expects the "fear premium" to remain intact through next week ahead of the U.S. midterm elections, given U.S. threats of renewing strikes on Iran and Iranian threats of retaliation. WTI is up 2.6% at $102.03 a barrel and Brent gains 2.2% to $115.63 a barrel. (anthony.harrup@wsj.com)
0856 ET - Treasury yields edge higher following Thursday's decline as markets grow convinced the Fed will hold rates steady next week despite rising oil prices. Threats of escalation in the Middle East push Brent crude up 2% to $115 a barrel. Meanwhile, markets price in 92% odds of a Fed hold, according to CME, although a hike is expected for December. U.S. manufacturing and services PMIs at 9:45 a.m. ET are expected to tick lower, according to a WSJ consensus. The October University of Michigan consumer sentiment index, at 10 a.m., is also expected to decline. The 10-year yield is at 4.984% and the two-year at 4.682%, both on pace for a weekly decline. (paulo.trevisani@wsj.com; @ptrevisani)
0827 ET - SLB's data-center solutions business continues to grow quickly, CEO Olivier Le Peuch says in the company's 3Q earnings release. Revenue across the division was up 23% sequentially, driven by growing demand, a broadening scope of services and geographic expansion into Asia. "AI is driving unprecedented investment in data center infrastructure, and customers are looking for partners who can deploy quickly, reliably and at scale," Le Peuch says. SLB's planned $4.1 billion acquisition of Kelvion, a thermal-management company, will strengthen its technology portfolio, further supporting the data center business, he adds. "Overall, we continue to strengthen our position as an industrial technology partner to the data center industry and to expand our participation in this rapidly growing market," Le Peuch says. (connor.hart@wsj.com)
0826 ET - High energy prices and rising government bond yields appear to be weighing on business sentiment in the eurozone, Commerzbank's Vincent Stamer says in a note. The composite PMI fell to 51.9 in October from 53.1 in September, dragged down by France. The gauge has therefore slipped into a range where the economy has historically grown at a rate below average, or 0.4% quarter-on-quarter, he says. More companies, particularly in the manufacturing sector, report rising input prices, suggesting the renewed rise in energy prices from the Iran war weighs on sentiment. But rapidly rising government bond yields and the deadlocked budget negotiations in France are also likely hurting confidence, he says. (edward.frankl@wsj.com)
0635 ET - The U.S. dollar and Treasury yields rise slightly in European midday trade. The dollar gains support from rising oil prices, which often support the currency, both because the U.S. is an oil exporter and due to safe-haven flows. Treasury yields rise after sharp falls the previous day, though their safe-haven role could resurface due to concerns about the sustainability of AI investments and stock-market falls. "Concerns over how technology companies will finance the AI build-out...could limit any meaningful rebound in yields," says VT Markets Dubai's Mahmoud Mashal in a note. The 10-year Treasury yield rises 2.9 basis points to 4.982%, according to Tradeweb. The DXY dollar index rises 0.2% to 101.763. (emese.bartha@wsj.com)
0627 ET - Oil prices rise in afternoon trading, with WTI futures now above $101 a barrel, driven by Houthi attacks on Saudi Arabia and fears of further escalation between the U.S. and Iran before the midterm elections. The U.S. oil gauge is up 1.6% to $101.04 a barrel, while Brent crude rises 1% to $114.28 a barrel. "Market sentiment remains nervous," analysts at Commerzbank say. According to data from Kpler, oil flows through the Strait of Hormuz remain 26% below prewar levels, with the seven-day average at 12.65 million barrels per day versus a baseline of 17.15 million, as attacks on shipping keep the risk premium for freight and crude elevated. Still, Middle Eastern oil supplies--excluding Iran--that are reaching global markets are above prewar levels. (giulia.petroni@wsj.com)
0518 ET - Eni's extraordinary dividend of 1.3 billion euros is higher than expected and the highlight of its 3Q results, along with the increased buyback volume, UBS analysts say in a note. UBS had expected a special dividend of 1 billion euros. The higher distributions stem in part from better guidance in some of the Italian energy company's operating segments as well as better macro assumptions, according to UBS. The buyback hike is the third one for Eni this year, reflecting how the Middle East conflict and high refining margins are offering energy majors a lift. Eni's net profit beat UBS's estimate by 16%, helped by a lower tax rate. Shares trade 3.7% higher at 27.10 euros. (sarah.sloat@wsj.com)
0357 ET - European natural-gas prices climb to their highest since late 2022 as fears of renewed escalation between the U.S. and Iran threaten LNG supply ahead of winter. The benchmark Dutch TTF contract rises 3.8% to 93.43 euros a megawatt-hour, on track for a weekly gain of nearly 7%. According to analysts, EU gas storage levels seem to have peaked at only 75%. "The only hope is that the mild temperatures Europe has experienced so far this winter will continue," according to ANZ. "Most forecasts are pointing to unseasonably warm weather returning to northwest Europe next week. However, temperatures are expected to drop in November."
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