The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
0958 GMT - The Norwegian krone falls along with oil prices on optimism over diplomatic efforts to end the U.S.-Iran conflict. President Trump said at the weekend that negotiations with Iran to end the war were "going fine" while U.S. Secretary of State, Marco Rubio, said the U.S. was open to a diplomatic solution. Brent crude drops more than 4% to $108.61 per barrel. The krone has a strong positive correlation to oil prices as Norway is a major oil and gas producer. The euro rises more than 1% to 10.3660 krone, LSEG data show. (renae.dyer@wsj.com)
0958 GMT - BP's management must finish the job of shoring up the balance sheet before it can consider share buybacks, UBS's Joshua Stone writes. After earnings that beat expectations for the third time this year, investor attention will turn to December's strategy update, the analyst says. A financial framework that will remain resilient in a lower price environment is expected, he adds. Shares fall 1.7% to 616.80 pence. (adam.whittaker@wsj.com)
0943 GMT - The dollar falls to a one-month low against a basket of currencies as oil prices ease significantly. Renewed diplomatic efforts to end the U.S.-Iran conflict ease concerns over Middle East supply disruptions, sending Brent crude down 4% to 108.91 per barrel. Investors are also looking ahead to the U.S. midterm elections on Tuesday along with tech earnings this week and the all-important U.S. nonfarm payrolls report on Friday. The DXY dollar index falls to as low as 101.426. The euro rises to an 11-day high of $1.1237, according to LSEG. Sterling rises a near seven-week high of $1.3449. (renae.dyer@wsj.com)
0937 GMT - Sterling faces some possible consolidation against the euro after its recent sharp appreciation but it is too early to expect a significant correction, ING's Chris Turner says in a note. Elevated energy prices should keep expectations for higher U.K. interest rates in place until early next year while French budgetary problems remain unresolved, he says. A potential 25 basis-point rate increase by the Bank of England on Thursday looks like a done deal, he says. "Upside economic surprises, U.K. fiscal policy seemingly heading in the right direction and warmer ties with the EU all seem to be helping sterling too." The euro rises 0.2% to 0.8355 pounds after hitting a 19-month low of 0.8317 Friday, LSEG data show. (renae.dyer@wsj.com)
0937 GMT - Goldman Sachs raises its oil price forecasts, saying persistent Middle East supply risks are expected to sustain a sizable geopolitical risk premium in the near term. "We now expect markets to price in a higher risk premium, reflecting downside risks to Mideast supply, the length of past major oil supply shocks, and many market participants' view that a lasting diplomatic breakthrough will be difficult," analysts at the bank say. Goldman now expects Brent to average $105 a barrel in December 2026 and $88 in 2027, up from previous forecasts of $90 and $80, respectively. The bank estimates that a geopolitical risk premium of around $27 a barrel accounted for most of October's oil price rally, while Brent's fair value remained broadly stable in the $90s, as global inventories--a key driver of prices--were little changed. (giulia.petroni@wsj.com)
0933 GMT - The dollar's potential to fall on the prospect of a Democratic sweep in Tuesday's midterm elections looks limited, ING's Chris Turner says in a note. One could argue that the dollar should fall on such an outcome as it would likely lead to a gridlock on the debt ceiling, a prolonged government shutdown next year and possibly encourage President Trump to pursue an even more activist foreign policy agenda, he says. "Many of those views are speculative, however." What isn't speculative is strong U.S. economic growth, high inflation and the Federal Reserve ready to raise interest rates again, he says. The DXY dollar index falls 0.3% to a 10-day low of 101.530. (renae.dyer@wsj.com)
0927 GMT - The retreat in oil prices eases inflation concerns, causing markets to slightly scale back expectations of interest-rate rises by major central banks. Brent crude falls 4.1% to $108.83 a barrel due to renewed diplomatic efforts to end the conflict between the U.S. and Iran. "Lower energy prices are providing some relief to inflation expectations and broader market sentiment, particularly after October's substantial rally in crude," Capital.com's Daniela Hathorn says in a note. U.K. government-bond yields fall sharply amid lower oil prices and by more than their eurozone counterparts, with 10-year gilt yields dropping around 5 basis points to a six-week low of 5.228%, LSEG data show. (miriam.mukuru@wsj.com)
0911 GMT - Oil prices drop more than 3.5% ahead of the U.S. midterm elections as diplomatic discussions involving Qatari mediators over a potential deal to reopen the Strait of Hormuz ease the risk premium. However, concerns over a possible resumption of U.S. military strikes on Iran remain elevated. "The price action in oil in recent weeks reflects a market increasingly bracing for the potential for more hostilities between the U.S. and Iran," analysts at ING say. "Given that many of the key developments in this conflict have unfolded over weekends, the market may have to hold its breath until the end of the week." In early European trading, the front-month Brent crude contract slides 3.9% to $109.04 a barrel, while WTI futures drop 4% to $99.94 a barrel. (giulia.petroni@wsj.com)
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%.
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