The latest Market Talks covering Energy and Utilities. Published exclusively on Dow Jones Newswires at 4:20 ET, 12:20 ET and 16:50 ET.
0906 GMT - BP's valuation discount could shrink as cash flows improve and investors get more visibility on upstream growth projects, Berenberg analysts write. The British energy major's efforts to cut net debt will remain central to its December strategy update, they say. Where BP allocates spending across its upstream portfolio and an update on its Brazilian exploration efforts will also be in focus, they say. Shares fall 1.4% to 618.50 pence. (adam.whittaker@wsj.com)
0830 GMT - Reliance Industries keeps its bull at Nomura following stronger-than-expected 2Q earnings, driven by the standout performance of the Indian conglomerate's oil-to-chemicals business. Segment Ebitda was a record 252 billion rupees, up 68% on year and 48% on quarter--and 24% ahead of Nomura's estimates. "With cracks broadly stable quarter on quarter at multidecade highs...the sequential jump came from a lower crude basket cost, better margin capture and higher throughput," analysts Bineet Banka and Abhishek Bhandari write in a note. The segment's Ebitda margin rose 2.5 percentage points on quarter to 10.9%. Nomura raises its FY 2027 Ebitda forecast for Reliance by 2% and reiterates a buy rating. However, it lowers the stock's target price by 7.7% to 1,560 rupees due to a roll-forward adjustment. Shares rise 7.6% to 1,252 rupees. (farah.elias@wsj.com)
0821 GMT - Cnooc's H shares remain undervalued and offer a 2026 dividend yield above 6%, Morningstar's Chokwai Lee says in a note. The Chinese oil and gas producer recorded strong results for the first nine months of the year, supported by high oil prices, while its expansion strategy remains intact with a disciplined approach to overseas growth, Lee says. Net production was in line with expectations, and Cnooc remains cost competitive, Lee adds. Supply disruptions to energy is expected to continue into 2027, supporting elevated oil and gas prices in the near term, Lee says. Morningstar retains its fair-value estimate for A shares at 28.00 yuan but raises it to HK$33.00 from HK$32.00 for H shares, reflecting the Chinese yuan's appreciation. The H shares close at HK$24.52. (kimberley.kao@wsj.com)
0815 GMT - European energy majors start the week lower after oil prices drop nearly 3%. Renewed diplomatic efforts to end the conflict between the U.S. and Iran have helped ease supply concerns. Brent crude futures for January delivery fall 2.85% to $110.23 a barrel, while U.S. West Texas Intermediate futures for December delivery drop 3.3% to $100.72 a barrel. This pulls BP down 2.4% and Shell 1.3% lower. Spain's Repsol falls 1.5% while France's TotalEnergies slides 1%. (adam.whittaker@wsj.com)
0806 GMT - Spain's Repsol will get a boost from elevated refining margins into 2027 that will likely drive consensus estimates higher, Berenberg analysts write. This could then drive another strong year for shareholder distributions, they say. The analysts raise their 2027 refining indicator margin estimate to $15 a barrel from $12, which drives an 11% increase in the bank's adjusted net income estimate. Shares fall 1.2% to 30.35 euros.(adam.whittaker@wsj.com)
0311 GMT - China Longyuan Power's earnings may be nearing an inflection point, with an improving tariff outlook in 2027 providing a positive catalyst to the stock, Deutsche Bank analyst Gary Zhou says in a note. Besides, favorable bidding for mechanism tariffs across several provinces will also be supportive for the company, the analyst says. The stock is trading near its historical trough valuation of 0.5 times book value, Zhou says, retaining a buy rating. However, DB lowers its target price to 6.70 Hong Kong dollars from HK$7.00 to factor in worse-than-expected 3Q results. Shares are up 1.8% at HK$5.17. (venkat.pr@wsj.com)
2400 GMT - Oil prices drop amid recent diplomatic efforts to revive peace negotiations between Washington and Tehran. U.S. Vice President JD Vance sent a message to Mohsen Rezaei, secretary of Iran's Supreme National Security Council, in an effort to restart peace talks, The Wall Street Journal has reported. Meanwhile, key members of OPEC and their allies agreed Sunday to keep oil production steady in December as concerns that the U.S. could resume strikes against Iran after the midterm elections keep geopolitical risks elevated. Front-month West Texas Intermediate crude-oil futures are down 1.75% at $102.3 a barrel, while front-month Brent is 1.6% lower at $111.59 a barrel.(sherry.qin@wsj.com)
2209 GMT - Macquarie says Australia's new domestic natural-gas reservation policy doesn't appear problematic for the Australia Pacific LNG project, which is part owned by Origin Energy. That view reflect APLNG's large domestic production. Still, Macquarie does highlight the threat of a potential fall in natural-gas prices to A$10-A$11 per gigajoule, from A$12-A$13/GJ. "Origin is exposed via its low cost APLNG contract (40 petajoules), and the reset of the Beach contact which will be mispriced, relative to forward prices," says Macquarie. It estimates some A$60 million of Ebitda is at risk. Macquarie retains a neutral call on Origin.
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