The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.
0937 ET - U.S. natural gas futures are higher in early trading after three straight weeks of declines. Futures are "correcting the oversold condition with profit-taking by fund shorts now seen as buyers," Dennis Kissler of BOK Financial says in a note. Near-term fundamentals remain negative with weather forecasts into mid-November mostly mild for most of the U.S., he adds. "Seasonally prices remain under pressure into the second week of November." Nymex natural gas is up 1.2% at $2.934/mmBtu.(anthony.harrup@wsj.com)
0909 ET - Crude futures are tumbling to start the week on hopes for U.S.-Iran peace talks. The pullback comes with "escalation longs" at a peak so close to the U.S. midterm elections, Scott Shelton of TP ICAP says in a note. But "there is nothing I see to suggest that this any different that previous peace attempts, and the size of the move is because positions have never been larger as people have their bets on for what is going to happen post U.S. midterms," he adds. "This next step is either escalation or Iran capitulating." WTI is down 6.2% at $97.62 and Brent is off 6.1% at $106.57 a barrel. (anthony.harrup@wsj.com)
0837 ET - Hapag-Lloyd's third-quarter performance will receive a boost from elevated freight rates, Deutsche Bank analyst Harishankar Ramamoorthy writes. The China Containerized Freight Index has risen 55% on average in the quarter on last year, after a 16% rise in the second quarter. The bank forecasts third-quarter Ebitda to more than double year on year to $1.95 billion, with EBIT at around $1.3 billion. Hapag-Lloyd revised its guidance in September, with the expected Ebitda range raised to $3.9 billion-$4.4 billion and EBIT to $1.25 billion-$1.75 billion. With October freight rates still elevated, Deutsche Bank remains slightly above the top end of the ranges. It keeps its hold rating on the stock and lifts its price target to 125 euros from 117 euros. The German shipping company is due to report third-quarter earnings on Nov. 12. Shares rise 0.3% to 133.90 euros. (dominic.chopping@wsj.com)
0701 ET - Oil prices extend losses in afternoon trade, with both benchmarks sliding more than 4% as progressing talks between Iranian officials and Qatari mediators raise hopes for U.S.-Iran peace negotiations. Front-month Brent crude is down 4.4% at $108.46 a barrel, while WTI futures decline 4.5% to $99.40 a barrel. "The latest decline reflects improving expectations surrounding diplomatic negotiations involving Iran, with renewed discussions raising hopes that regional hostilities and disruptions to energy shipments could eventually ease," Naeem Aslam of Zaye Capital Markets says. However, uncertainty remains elevated across global energy markets amid concerns that the U.S. could resume military strikes against Iran following the midterm elections. (giulia.petroni@wsj.com)
0617 ET - European stock indexes rise in late morning European trade, reversing losses at market open. Brent crude oil prices fall around 4.4% to $108.42 a barrel on hopes for diplomatic developments in the Middle East, buoying energy-intensive sectors. The continent-wide Stoxx 600 inches up 0.1% after opening in the red. Travel and leisure stocks are the leading sector, rising 1.9%. The French CAC 40 gains 0.4%, while the German DAX is up 0.3%. London's FTSE 100 edges 0.05% higher. Indexes in Italy and Spain rise, with the IBEX 35 up 1.1% as banks rally, while British Airways owner IAG adds 2.55%. The Dutch AEX is flat. (josephmichael.stonor@wsj.com)
0554 ET - Morgan Stanley raised its bullish price scenario for European natural gas to 150 euros a megawatt-hour from 135 euros, citing colder November forecasts, firm Asian LNG demand and geopolitical risks that could tighten winter supplies. TTF prices already climbed above 100 euros a megawatt-hour last week. Europe is entering winter with gas storage at just 73% of capacity, well below the 10-year seasonal average of 90%, leaving the market vulnerable to colder weather and sharp price swings. Strong Asian demand is also making it harder for Europe to attract additional LNG cargoes, increasing the risk of tighter supplies in the first quarter. Morgan Stanley has kept its winter average price forecast at 90 euros a megawatt-hour but says risks remain tilted to the upside, particularly if colder weather accelerates storage withdrawals. (giulia.petroni@wsj.com)
0552 ET - Yields on U.K. government bonds, or gilt, fall to multiweek lows as declining oil prices cause inflation fears to subside. Ongoing Iran peace talks are enabling oil prices to retreat, contributing to improved market sentiment. "The [energy prices] pullback moderates the immediate geopolitical risk premium," Tickmill Group's Patrick Munnelly says in a note. Investors have also slightly scaled back their expectations for Bank of England interest-rate rises to 106bps by the end of 2027, down from 119bps last week, LSEG data show. Ten-year gilt yields fall to 5.219%, a nearly six-week low, while 30-year gilt yields drop to their lowest in more than 12 weeks at 5.646%, LSEG data show. (miriam.mukuru@wsj.com)
0527 ET - Brent crude prices could reach $140 a barrel and average around $130 next year if Gulf oil production remains significantly below prewar levels, according to Goldman Sachs. In this upside scenario, output would be 3.5 million barrels a day below its 2025 average, compared with 1.1 million barrels a day above that level in the bank's base case. "The most likely price-upside triggers are intensified shipping attacks, damage to oil infrastructure, and a more persistent risk premium," analysts at Goldman say. Brent could, however, fall into the $60s if Gulf production recovers faster than expected, rising to 2.5 million barrels a day above 2025 levels, in the event that the U.S. and Iran reach a deal that markets perceive as sustainable. (giulia.petroni@wsj.com)
0514 ET - Palm oil futures end lower, tracking weakness in crude prices. Weaker oil prices weigh on palm oil's appeal as a biodiesel feedstock. Sentiment also remains cautious amid expectations of rising October stockpiles and uncertainty around a potential Malaysian export tax waiver, say Kenanga Futures analysts in a note. They peg the support and resistance levels for the January futures contract at 4,630 ringgit and 4,750 ringgit, respectively. The Bursa Malaysia Derivatives contract for January delivery declines 31 ringgit to 4,650 ringgit a metric ton. (megan.cheah@wsj.com)
0500 ET - Apollo Global Management CEO Marc Rowan says you cannot be AI sovereign without three things: models, chips and energy. "That's where we are," he says in an interview with WSJ Leadership Institute. "And almost everyone is short energy." Rowan says a very large percentage of--probably about $50 billion to $75 billion of the up to $500 billion in financing Apollo plans to originate this year--will go toward energy. Beyond energy, Rowan says the other piece of the AI boom that Apollo feels comfortable financing is chips. "I believe you can finance chips safely because chips are in short supply," he says. "Today, you can look out and say for the next five years, just like we're short energy, we're short chips." (connor.hart@wsj.com)
0458 ET - 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)
0458 ET - 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.
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