The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
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. (adam.whittaker@wsj.com)
0747 GMT - The U.S. midterms are a key test for oil prices as investors parse the outcome for the administration's next move in the Middle East, the duration of supply disruptions and crude's geopolitical premium, says Ipek Ozkardeskaya at Swissquote. If Democrats gain control of one or both chambers, they could increase scrutiny of war policy, challenge military funding and increase pressure for a diplomatic solution once the new Congress is formed. "Markets, however, could anticipate that pressure immediately," she says. And if that's followed by credible negotiations and prospects of safer shipping through the Strait of Hormuz, oil prices could fall sustainably. However, a weaker Republican position wouldn't automatically mean a lower geopolitical risk premium, even if it adds pressure for a diplomatic resolution. (fabiana.negrinochoa@wsj.com)
0739 GMT - The dollar falls on AI concerns and investor jitters ahead of Tuesday's midterm elections. Apple on Monday warned that the cost of serving its AI tools would squeeze its margins, fuelling worries about the sustainability of AI investments. AI model maker Anthropic posted an operating loss for the third quarter due to a pricey data-center deal while rival OpenAI raised less than half of the $30 billion it had initially targeted for its latest funding round. More positively for the dollar, oil prices turn higher after the U.S. attacked Iran's Qeshm Island on Monday. However, uncertainty over the midterms keeps investors cautious. The DXY dollar index falls 0.1% to 101.684, having reached a one-month low of 101.426 Monday.
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