The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
1227 GMT - French energy major TotalEnergies posted a modest beat against raised consensus expectations, HSBC's Kim Fustier writes. Stellar LNG results and exceptional margins helped drive cash generation in the third quarter, she says. Management now sees full-year free cash flow from operations between $42 billion and $43 billion, and if does hit the upper range, the final dividend could be increased to meet the company's payout commitment, the analyst writes. Shares are up 0.3% at 83.90 euros. (adam.whittaker@wsj.com)
1055 GMT - The dollar turns higher as Treasury yields rise and oil prices rebound after sharp falls in the previous session. The U.S. struck Iran's Qeshm Island in the Strait of Hormuz on Monday, the WSJ reported, citing U.S. officials. The WSJ reported separately that America's Gulf allies are preparing for the possibility of a broader U.S. military campaign against Iran. Brent crude rises 1.1% to $105.89 per barrel after reaching a three-week low of $103.28 Monday, LSEG data show. Higher oil prices support the dollar as the U.S. is a net oil exporter. The DXY dollar index rises 0.1% to 101.816 after hitting a one-month low of 101.426 Monday but gains are limited amid investor caution ahead of Tuesday's midterm elections. (renae.dyer@wsj.com)
1046 GMT - Growth in Saudi Arabia's non-oil private sector eases in October as new orders moderate and export demand remains weak, according to Riyad Bank's purchasing managers' index compiled by S&P Global. The headline index declines to 54.0 from 55.3 in September, remaining above the 50 threshold separating expansion from contraction. Business output grows at a faster pace, supported by domestic demand, but new export orders fall for an eighth consecutive month amid shipping disruptions and higher freight and insurance costs. Purchasing-price inflation reaches a six-month high, while selling-price inflation eases to a nine-month low. (farhan.rafid@wsj.com)
1045 GMT - Saudi Aramco expects its gas investments to generate between $12 billion and $15 billion in additional annual operating cash flow by 2030, as the company expands production and reduces domestic reliance on liquid fuels. A company finance executive says the investments are expected to deliver returns of around 12% to 14%, supported by government arrangements. Chief Executive Amin Nasser says the additional gas supply could free up nearly 1 million barrels a day of liquids for export by replacing fuels used in power generation, industry and agriculture. Aramco aims to increase gas production 80% between 2021 and 2030. (farhan.rafid@wsj.com)
1044 GMT - Saudi Aramco is receiving numerous requests from customers and international partners for additional oil storage facilities as prolonged supply disruptions prompt countries and companies to reassess their inventories. Chief executive Amin Nasser says the company is working to meet the requests, with some countries holding reserves sufficient for only a few days of consumption. He estimates that filling newly developed storage facilities could require an additional 1 million barrels a day of oil supply, on top of roughly 2 million barrels a day needed over two years to replenish depleted inventories if disruptions ended immediately. (farhan.rafid@wsj.com)
1026 GMT - Countries may need to reconsider whether emergency oil reserves covering 90 days of consumption are sufficient to withstand prolonged supply disruptions, Saudi Aramco Chief Executive Amin Nasser says. The nine-month disruption to energy shipments has exposed weaknesses in national stockpiles, with some countries holding reserves covering only a few days, he says. Even governments maintaining the traditional 90-day buffer may need additional storage capacity to protect against extended interruptions. Nasser warns that persistent shortages of refined products, particularly diesel and jet fuel, could cause significant disruption to the global economy. (farhan.rafid@wsj.com)
1012 GMT - Oil prices trim earlier gains, with front-month Brent crude rising 0.6% to $105.45 a barrel and WTI futures up 0.8% to $97.28 a barrel. Prices had risen more than 1.5% earlier in the session after the U.S. attack on Iran's Qeshm Island fueled fears of renewed escalation in the region. Despite signs of progress in diplomatic talks this week, uncertainty over regional developments and persistent threats to shipping continue to provide a strong floor for prices. Traders are now turning their attention to the U.S. midterms. "The decisive question will be whether the midterm elections can align the political pieces to pave the way for more normal supply conditions--or push that prospect further away," says Ipek Ozkardeskaya from Swissquote. (giulia.petroni@wsj.com)
0916 GMT - European natural-gas prices rebound after settling more than 8% lower in the previous session. In early trading, the benchmark Dutch TTF contract rises 3.6% to 98.25 euros a megawatt-hour as investors weigh fresh U.S. strikes on Iran against diplomatic efforts to end the conflict. "For the gas market, de-escalation is crucial, as LNG flows from the region haven't recovered as much as on the oil side," analysts at ING say. "This leaves the market vulnerable as it heads deeper into the European heating season." (giulia.petroni@wsj.com)
0831 GMT - If Republicans retain control of Congress, that could mean more upside risks to oil prices as the U.S. administration would face fewer political obstacles in carrying out foreign policy, says Ipek Ozkardeskaya at Swissquote. "The geopolitical stalemate in the Middle East could persist, while the end of the election campaign could reduce the immediate political urgency to bring energy prices down," she writes. If temporary measures to ease pressure on energy prices are allowed to expire or scaled back, that could drive up U.S. petrol prices in the short run, the analyst adds. On the monetary front, higher energy prices would strengthen the case for further rate hikes by the Fed and other major central banks. (fabiana.negrinochoa@wsj.com)
0826 GMT - Saudi Aramco reports resilient third-quarter results despite the challenging backdrop, Barclays analyst Lydia Rainforth writes. The oil major's adjusted net income came in around 2% ahead of consensus expectations due to strong downstream earnings, she says. While production rebounded, upstream earnings were hit by lower oil prices, she notes. (adam.whittaker@wsj.com)
0823 GMT - Saudi Aramco's strong 3Q earnings were complemented by the start of engineering work for an expansion of the East-West pipeline, J.P. Morgan analysts write. The key route was temporarily shut in September following drone attacks. But the analysts note that preliminary engineering work has begun for the pipeline's expansion and an increase in crude storage capacity. J.P. Morgan holds an overweight rating on the stock and a price target of 30 Saudi riyals. Aramco shares are 0.1% higher at 26.14 riyals. (joseph.wilkins@wsj.com)
0818 GMT - Saudi Aramco's results were solid in a challenging environment, RBC Capital Markets analyst Biraj Borkhataria writes. Rebounding production hit around 11 million barrels of oil equivalent a day over the quarter but the results were partially offset by weaker oil prices, he says. While there are near-term headwinds, the oil major will benefit from continued tightness in oil and product markets, he says. Meanwhile, replenishing global inventories will offer tailwinds, he adds.
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