The latest Market Talks covering Energy markets. Published exclusively on Dow Jones Newswires throughout the day.

2008 ET - Oil rises in early Asian trade, as prices find support amid supply concerns, says George Pavel, Naga.com Middle East's general manager. U.S. sanctions on Russian oil tankers and producers add on to uncertainties and may lead to a tightened supply landscape, he writes in a note. The Fed's potential rate cuts after recent inflation data showed signs of easing, could further support economic activity and energy demand, he says. Front-month WTI crude oil futures are up 0.3% at $78.92/bbl; front-month Brent crude oil futures are 0.2% higher at $81.44/bbl.(amanda.lee@wsj.com)

1949 ET - Australian gold miners aren't as cheap as they once were, but many still appeal due to strong cash generation and the likelihood of an increased focus on investor returns, UBS analysts say. "We remain largely Buy rated across our coverage despite some of the upside being captured," the analysts say in a note. They expect gold to keep rallying because of ongoing geopolitical risks and resilient consumer demand. They reiterate UBS's forecast for US$2,900/oz gold by mid year, "which equates to circa A$4,500/oz or even higher if the weak A$ prevails." (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

1519 ET - Oil futures pull back from five-month highs reached on supply concerns around U.S. sanctions and winter heating fuel demand. "Crude oil finally caved under pressure from an overbought RSI," Mizuho's Robert Yawger says in a note, referring to the relative strength index. "Positioning is driving energy prices lower today. There is no associated bearish red headline." Crude maintains support from demand for heating oil, which held out for a 0.1% gain as an Arctic blast is expected over large parts of the U.S. in the coming week. The WTI front month settles down 1.7% at $78.68, and Brent falls 0.9% to $81.29. (anthony.harrup@wsj.com)

1503 ET - U.S. natural gas futures rise for a third consecutive day with a boost from weather forecasts adding to implied heating demand later in the month. The 258 Bcf inventory drawdown reported for last week was in line with expectations, and did little to move the price, Gelber & Associates says in a note. "A colder revision to the 11-15 day forecasts for the closely watched EPS weather model, however, was bullish enough to spark a rally upon its release at noon, as markets priced in the possibility that cold lasts for longer than expected." The Nymex front month gains 4.3% to $4.258/mmBtu, the highest settlement value since the end of 2022. (anthony.harrup@wsj.com)

1412 ET - The province of Ontario is considering a new large-scale nuclear power plant near Port Hope, which would be a good project for AtkinsRealis to show off its industry chops, according to RBC Capital Markets in a report. Analyst Sabahat Khan says the new potential plant, combined with a proposal to build a new nuclear generating station at the Bruce Power site in Ontario, "could offer meaningful opportunities for AtkinsRealis." Khan notes that engineering and construction companies Aecon and ATS could also see potential opportunities. Khan thinks the projects would span the medium-to-long-term given the permitting and approval timelines and eventual construction of full-scale nuclear plants, "but work/wins for these firms would likely be announced well in advance." (adriano.marchese@wsj.com)

1209 ET - With January shaping up to be the coldest in a decade, driving up heating demand, and the LNG expansion cycle under way, analysts at Morgan Stanley raise their forecasts for U.S. natural gas prices in 2025. The bank sees prices at Henry Hub averaging $4.15 per million British thermal units this year, up from $3.75/mmBtu previously, and cuts its storage estimate for the end of March from 1.84 trillion cubic feet to 1.55 Tcf, or about 17% below the 5-year average. "Winter weather has been a tailwind so far, but remains a variable for the 2025 outlook," they say in a note. Milder February-March weather could leave inventories at 1.8 Tcf, while a colder-than-normal end to the winter withdrawal season could lower stocks to about 1.3 Tcf, they add.(anthony.harrup@wsj.com)

1048 ET - Last week's decrease in U.S. natural gas inventories is in line with expectations, reducing the surplus over the 5-year average and deepening the deficit versus year-earlier levels. Gas in underground storage fell by 258 Bcf in the week ended Jan. 10 to 3,115 Bcf, which was 77 Bcf more than the 5-year average and 111 Bcf less than at this time in 2024, the EIA reports. Analysts surveyed by the Wall Street Journal had forecast a storage withdrawal of 259 Bcf. The Nymex front month gives up early gains and is off 1% at $4.043/mmBtu. (anthony.harrup@wsj.com)

1040 ET - Fed governor Chris Waller could hardly have been more direct in asserting that traders are underestimating the schedule of upcoming Fed rate cuts. "As long as the data comes in good on inflation, or continues on that path, I could see rate cuts happening sooner than the markets are pricing in," Waller says in an interview with CNBC. Even after some good news on inflation yesterday, futures markets reflected less than 50-50 odds that the Fed would cut by another quarter point before June. Waller seemed keen to push back on that expectation in the interview, reiterating several times that cuts in the first half of 2025 are highly plausible. (matt.grossman@wsj.com; @mattgrosman)

1021 ET - Federal Reserve governor Christopher Waller says that the central bank could resume cutting interest rates in the first half of the year if inflation continues to show that it has cooled. If price pressures continue on the current path of decelerating, "it's reasonable to think rate cuts could possibly happen in the first half of the year," Waller says in an interview on CNBC. Waller doesn't push back on expectations the Fed will hold steady in January, but says "you could think about restarting rate cuts several months from now." (matt.grossman@wsj.com, @mattgrossman)

0930 ET - Oil futures are slightly lower after settling at a five-month high the previous session, but continue to find support on concerns about stepped-up U.S. sanctions on Russia, declining U.S. stockpiles and winter weather-driven demand for heating fuels. "However, news of a ceasefire in the Middle East has reduced the geopolitical risk premium, tempering price momentum," George Pavel of Naga.com Middle East says in a note. "Global oil consumption continues to rise, driven by strong travel activity in India and China. Nevertheless, demand has slightly underperformed expectations, contributing to market caution," he adds. WTI is off 0.2% at $79.88 a barrel and Brent is 0.1% lower at $81.96 a barrel. (anthony.harrup@wsj.com)

0908 ET - U.S. natural gas futures are moderately higher as the market watches for the EIA's weekly storage report, which is expected to show a much bigger than average withdrawal. Analysts in a Wall Street Journal survey predict a 259 billion cubic-foot draw for last week that would reduce the inventory surplus over the 5-year average to 76 Bcf from 207 Bcf the previous week. Current and coming cold weather is expected to turn the surplus into a deficit in following weeks. The Nymex front month is up 1.2% at $4.133/mmBtu. (anthony.harrup@wsj.com)

0903 ET - OPEC+ is expected to continue defending oil prices and scrap plans to increase production this year due to strong supply growth from countries outside the alliance, according to DNB Markets analysts. "We see no room for more OPEC oil into the market in 2025" Helge Andre Martinsen and Tobias Ingebrigtsen say. "If OPEC extends current production cuts in order to defend oil prices, we end up with a rather balanced oil market for 2025." Under this scenario, DNB forecasts Brent crude at an average of $78 a barrel this year. However, should OPEC+ proceed with its planned output hike, prices are forecast to fall into the $60-$70 a barrel range. (giulia.petroni@wsj.com)

(END) Dow Jones Newswires

January 16, 2025 20:08 ET (01:08 GMT)

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