The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
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)
0810 GMT - No major changes in Israeli economic policy are expected irrespective of how the current political dynamics play out over the coming months, J.P. Morgan's strategists say. Israel's national legislative Knesset elections surprised last week with stronger results for both Prime Minister Benjamin Netanyahu and the country's Arab parties. JPM forecasts two outcomes: an election re-run in 2027, which would be negative for risk assets, or a unity government, which would be more positive. "Increased market optimism and currency strength would imply wider room for the Bank of Israel to ease policy," the strategists say, adding there is less room for such an outcome since the vote. "We see a substantial risk that the last 25 basis points cut of the cycle, which we have penciled in for November, will never be delivered."(joseph.wilkins@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)
0625 GMT - The risk-reward to being tactically long in European government bonds has increased even as risks toward higher energy prices remain, RBC Capital Markets analysts say in a note. "One could envisage a tactical bond market rally from here in both a scenario where energy surges higher (say on a geopolitical escalation) or starts falling again (in a de-escalation)," they say. RBC Capital Markets has been bond bears for quite some time now and doesn't think that the structural backdrop behind the current yield levels has changed. "Tactically, however, we think the market might well correct further, and it remains to be seen how resilient economic activity in the face of elevated rate-hike expectations and bond yields remain going forward."
Comments