MARKET MOVEMENTS:
–Brent crude oil is up 2% to $73.39 a barrel.
–European benchmark gas is up 5.4% to 46.73 euros a megawatt-hour.
–Copper futures are up 0.1% to $13,422.50 a metric ton.
–Gold futures are up 0.2% to $4,177.10 a troy ounce.
TOP STORY:
Rising Gulf Oil Output Sets Stage for Market Share Battle
As shipping traffic through the Strait of Hormuz gradually recovers, major Persian Gulf oil producers are racing to bring idle wells back online. Now they face another challenge: the return of millions of barrels risks a surplus that could sharpen competition for market share.
In a sign of the brewing scramble, Saudi Arabia–one of the world’s largest exporters of oil-reduced the price of its flagship crude grade for Asian buyers by $11 a barrel for August, its biggest monthly cut in more than two decades. Other Gulf crude producers, including the United Arab Emirates and Iraq, have also lowered their official selling prices.
“Aramco’s price cuts reinforce market concerns about oversupply and the potential for a price war, as Middle Eastern supply is recovering faster than demand,” said Muyu Xu, senior crude oil analyst at Kpler.
OTHER STORIES:
Jet-Fuel Prices Have Plunged but Aren’t Resulting in Much Lower Fares
Airlines are finally getting some relief at the jet-fuel pump. Fliers might not share in the savings, though.
Jet-fuel prices doubled in the weeks after the Iran war started, and carriers raised fares to keep up. Now fuel prices are down 40% from their peak in April, but analysts say fares aren’t likely to follow because travelers keep paying up.
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Adnoc Distribution to Buy Shell’s South African Fuels Business in $1 Billion Deal
Adnoc Distribution said it has agreed to buy Shell’s South African fuels business for $1 billion, including debt.
The subsidiary of Abu Dhabi National Oil Company will acquire 580 fuel stations, as well as Shell’s fuels lubricants businesses. It plans to continue to use the Shell brand for the retail service stations and lubricants businesses.
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The Iran War Has Oil-Rich Alaska Freaked Out About $9 Gas
DILLINGHAM, Alaska-John Stelling had just cranked the digits of his fuel pump to $9.10 at his gas station in this remote Alaskan community when he realized he had a problem. Could he push the meter to $10 if he had to?
“Not sure if it’ll handle those,” he said of double-digit fuel prices.
In rural Alaska, the war with Iran has led to some of the highest fuel prices in the nation. Remote towns and villages aren’t connected to the road system, so they pay hefty premiums to procure gasoline, heating oil and diesel for cranking out electricity.
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Plug Power Gets Orica Contract for Major Australian Hydrogen Project
Plug Power has secured a contract from Orica to supply equipment that will power what will be the largest renewable hydrogen project in Australia.
Orica’s Hunter Valley Hydrogen Hub project in Newcastle has reached final investment decision and thus will move into the construction phase, advancing the delivery of Plug’s GenEco Proton Exchange Membrane electrolyzers, Plug said on Tuesday.
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Shell’s Traders Get Boost From Conflict But Gas Output Falls on Lost Qatari Volumes
Shell’s traders continue to benefit from volatility triggered by the conflict in the Middle East, but lost Qatari volumes have squeezed output, highlighting the conflict’s uneven impact on the world’s big energy companies.
The British energy major said Tuesday that its gas-trading division is expected to report significantly higher results in the second quarter than the first after benefiting from higher gas prices, which are typically delayed due to price-lag effects in contracts. Shell’s oil traders are also expected to post a robust performance, continuing on from the bumper profits they netted at the start of the year.
MARKET TALKS:
Oil Futures Pick Up After Iran Fires At Vessels — Market Talk
0944 ET – Oil futures are higher after an Iranian attack on ships trying to cross the Strait of Hormuz on the Omani side, a sign of Iran’s determination to control the waterway. “Although the oil market’s response to the headlines has been muted and limited to the crude markets, this event is highlighting a continued major difference between the U.S. and Iran as to who controls the strait,” Ritterbusch & Associates says in a note. Crude futures are holding just above their pre-war levels as oil shipments continue through the strait. WTI is up 1% at $69.25 a barrel and Brent rises 1.1% to $72.80.([email protected])
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Grains Mixed After Crop Conditions Report — Market Talk
0942 ET – CBOT grain futures are mixed, with yesterday’s Crop Progress report showing little change to the condition of crops despite hot and dry conditions in recent days. Corn crop conditions were unchanged at 67% good-and-excellent, while soybean conditions fell one point to 64% good-and-excellent. Yield expectations for the U.S. crop are steady this week, says Michael Cordonnier of Soybean & Corn Advisor. “After a cooler end to June, July started out with much warmer temperatures, but they were short lived,” he says. CBOT corn futures are flat, while soybeans rise 0.1% and wheat is down 0.2%. ([email protected])
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Palm Oil Little Changed; Markets Await Report — Market Talk
1011 GMT – Palm oil ended the Asian session little changed. Rising production in Malaysia and caution ahead of a key palm oil report from the Malaysian Palm Oil Board, which will show overall supply and demand, may have limited room for gains, Kenanga Futures writes in a note. The Bursa Malaysia Derivatives contract for September delivery was 1 ringgit lower at 4,549 ringgit a ton. ([email protected])
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Gold Likely to Regain Lost Ground — Market Talk
0939 GMT – Gold is likely to regain lost ground in the longer term, Julius Baer’s Carsten Menke says in a research note. Investment demand for the yellow metal should pick up once clarity and conviction over the direction of U.S. monetary policy returns, Menke says. Demand should also be supported by central-bank buying, which is still the “strongest structural force in the market,” the head of next generation research says. He reiterates the bank’s constructive view on gold. “A lot of damage has been done and it will likely take some time for the market to find its footing,” he says. Spot gold is 0.9% lower at $4,126,90/oz. ([email protected])
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London’s Miners Fall on Gold Price Drop After Commercial Ships Attacked in Hormuz — Market Talk
0819 GMT – London’s miners fall in morning trade. Gold prices decline for a second day as attacks against two commercial ships near the Strait of Hormuz push oil prices higher and revive inflation concerns, MUFG’s Soojin Kim writes. Higher interest rates typically hurt non-yielding assets like silver and gold. In New York, gold futures fall 0.7% to $4,139.40 a troy ounce while silver falls 1.7% to $61.26 an ounce. Precious metal miner Hochschild Mining drops 3% while peers Fresnillo and Endeavour Mining fall 2.2% and 1.5%, respectively. Diversified miner Anglo American slides 2.1%. ([email protected])
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Climate-Driven Inflation, Not Just El Nino, Key to Watch — Market Talk
0811 GMT – It is more important to watch the broader impact of climate change on inflation than to focus solely on the effects of El Nino, Carsten Menke of Julius Baer writes in a note. “Although it raises fears about food inflation, there is no clear evidence of El Nino structurally pushing up prices,” Menke says. Historically, non-El Nino-related droughts pushed prices up, as did higher energy prices, demonstrating that a mix of factors can hurt agricultural production around the world, Menke adds. With extreme weather risks on the rise, inflation driven by climate change could become more prominent, but it is still remains to be seen whether it means more volatile or lastingly higher food prices, Menke says. ([email protected])
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Gold Falls After Iran’s Attacks Near Hormuz — Market Talk
0807 GMT – Gold prices fall as Iranian attacks against two commercial ships near the Strait of Hormuz revive concerns over inflation. “Overall, bullion remains rangebound as it attempts to shift from capitulation to consolidation, supported by softer U.S. data and a less hostile dollar and yield backdrop,” analysts at Saxo Bank say. “However, with short-dated U.S. yields still signaling a risk of a rate hike later this year, a further easing in rate expectations is needed to support a more durable recovery.” In early European trading, New York gold futures are down 0.7% at $4,138.50 a troy ounce. Traders now await the release of minutes from the Federal Reserve’s June meeting for further guidance on the policy outlook. ([email protected])
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Oil Up 1.5% After Ship Attacks Near Hormuz — Market Talk
0802 GMT – Oil prices rise more than 1.5% as Iranian attacks on commercial vessels near the Strait of Hormuz highlight persistent security risks despite diplomatic efforts. In early European trade, Brent crude rises 1.6% to $73.10 a barrel, while WTI futures are up 1.5% to $69.60 a barrel after settling at prewar levels in the previous session. Still, analysts say the upside is likely to remain limited. “Saudi Arabia has cut its August official selling prices, OPEC+ continues to unwind production cuts, Gulf exports are recovering, and the physical market remains well supplied,” says Soojin Kim from MUFG. ([email protected])
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Shell’s Trading Update Seen Pushing Consensus Expectations Higher — Market Talk
0736 GMT – Shell’s second-quarter update could push consensus net income expectations more than 10% higher, Jefferies analysts write. In the update, Shell raises integrated gas and upstream production guidance while reporting a better marketing and trading performance, they write. Shell’s shares rise 2.35% to 2,981 pence.([email protected])
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Malaysia’s Oil and Gas Sector Likely Supported by Energy Security Spending — Market Talk
(MORE TO FOLLOW) Dow Jones Newswires
07-07-26 1018ET
Source: Original Article
