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

1923 ET - The delay in ramping up Fortescue's Iron Bridge project to nameplate capacity disappoints Macquarie analysts, who expect little cost relief from the miner pushing out its production target. "FMG carries a large fixed-cost base at Iron Bridge," the analysts say in a note. "Therefore, we assume the volume cuts flow directly to the bottom line." However, they take a positive view on executive changes, which appear to indicate a refreshed focus on the metals business, they say. "One of our criticisms on FMG's 'FFI' strategy has been it's non-adjacency and limited grounds for genuine competitive advantage," say the analysts. "This move further aligns decarbonization and mining, potentially driving efficiency in operational decarbonization and green steel efforts." Macquarie has a "neutral" rating and A$15.00 target on Fortescue, which ended Thursday at A$15.89. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

1515 ET - Oil futures grind lower with geopolitical news taking a back seat and the possibility of another large output increase by OPEC+ for July raising supply concerns. Citi analysts see "highly binary geopolitical risks" around U.S. negotiations on Iran's nuclear program and the Russia-Ukraine war. "Geopolitics remain pivotal for the next move in oil up to $70 Brent, or down to the $50s," they say. Citi expects OPEC+ to hold output at June levels through 2H25, "but another three-month slug could put pressure back on the market." Meanwhile, the bank keeps its 0-3 month Brent view at $60. WTI settles down 0.6% at $61.20 a barrel, and Brent falls 0.7% to $64.44. (anthony.harrup@wsj.com)

1447 ET - U.S. natural gas futures fall as a large increase in underground storage--the biggest so far this injection season--confirms still soft seasonal demand. While not a surprise, the inventory build added some downward pressure to forward pricing, Andy Huenefeld of Pinebrook Energy Advisors says in a note. "Power generation demand is starting to grow, but has so far been limited by reduced air-conditioning needs across key population centers in the Midwest and East." At 2,375 Bcf, natural gas stocks at the end of last week were 90 Bcf above the five-year average and 333 Bcf below their year-earlier level. Nymex natural gas settles down 3.4% at $3.253/mmBtu. (anthony.harrup@wsj.com)

1401 ET - New York Fed President John Williams says that central banks face a challenging set of questions when determining the quantity of financial reserves to provide to the banking system. The problem would be simple in a world where the banking sector demanded a stable level of reserves over time, and where the central bank isn't active as a lender of reserves, Williams says at a New York City conference. But in the real world, he says, solving for the right level of reserves is more complex. In general, uncertainty about the level of reserves demanded at any given time means central banks need to provide more reserves than they otherwise would, Williams suggests. "In other words, there is no single best way to supply reserves; rather, the best mix of tools depends on circumstances and policy preferences," Williams says. (matt.grossman@wsj.com; @mattgrossman)

1057 ET - U.S. natural gas inventories rose by 120 billion cubic feet last week to 2,375 Bcf, or 90 Bcf above the five-year average for the time of year, the EIA reports. The injection was larger than the 87 Bcf average for the week, and slightly above the 116 Bcf estimate in a Wall Street Journal survey of analysts. With an early start to the injection season and mild spring weather, inventories have shifted from about a 12% deficit in early March to the current 3.9% surplus. Nymex futures are off 3.2% at$3.261/mmBtu. (anthony.harrup@wsj.com)

0950 ET - U.S. natural gas futures are lower with weekly storage data expected to show a fourth straight triple-digit weekly injection and weather models still pointing to modest demand for cooling. "Below average temperatures are remaining in most of the populated areas of the U.S.," Dennis Kissler of BOK Financial says in a note. "Above average temperatures will be needed soon if we're to see a substantial lift in prices." Nymex natural gas is down 2.4% at $3.288/mmBtu. (anthony.harrup@wsj.com)

0928 ET - Trade tensions are weighing heavily on American freight carried by Canadian rail operators. The volume of cargo carried by Canadian railways in March hit 33.3 million metric tons, up 1.7% on the same month last year, Statistics Canada data shows. That was driven by increased carloadings of wheat, canola and coal, which offset declines in movements of other commodities including iron and steel after the U.S. slapped an import tariff on Canadian steel and aluminum. The monthly increase was driven by domestic carloadings and overshadowed a fall in American freight traffic. Loadings from U.S. rail connections was down 16.1% to 3.4 million tons in March, a second consecutive fall and the lowest level recorded for the month of March since 2019. (robb.stewart@wsj.com; @RobbMStewart)

0921 ET - Oil futures are lower for a third straight session as the recent geopolitical boost recedes and focus is back on supply and demand. Ritterbusch sees "nothing significantly bearish" about yesterday's EIA report of U.S. crude and product inventory builds, "especially when the non-representative West Coast region was excluded." What is bearish for oil is the monthly production increase of more than 400,000 barrels a day from OPEC+, which "will become even more negative once the boost in OPEC supply becomes more transparent," the firm adds. WTI and Brent are both down 1.3% at $60.75 and $64.05 a barrel, respectively. (anthony.harrup@wsj.com)

0730 ET - European natural gas prices fall in afternoon trade, with the benchmark Dutch TTF contract down 0.8% to 36.32 euros a megawatt hour. However, analysts say there is likely limited room for prices to decline over the summer amid renewed investor confidence and supply concerns. Investment funds increased their net position in TTF gas futures by 5 terawatt hours last week, according to DNB Markets. "The recent decline in net positioning, triggered by the turmoil following Trump's Liberation Day on April 2, has now reversed," analysts at the firm say. Meanwhile, prices also find underlying support in supply-side issues following an outage of uncertain duration at a gas field in Norway and lower LNG send-outs. (giulia.petroni@wsj.com)

0701 ET - Foxconn Technology Group will likely face limited tariff impact due to its already extra-thin gross margins, Barclays analysts say in a research note. As a contract manufacturer, its low gross profit requires customers to absorb whatever negative impact ensues from tariffs, they say. Meanwhile, the analysts believe the company's future growth isn't limited to any particular large customer or product category. "Instead, Foxconn's dominant position enables the company to capture the opportunity to manufacture whatever the emerging tech products will be." Barclays initiates stock coverage with an overweight rating and target price of $14.00. (sherry.qin@wsj.com)

0656 ET - The eurozone's purchasing managers' surveys were weaker than expected, falling into contractionary territory and partly driven by a sharp downturn in Germany's services sector, ABN AMRO's Christophe Boucher says. The bloc's manufacturing sector surpassed the services sector in the survey for the first time in years, he notes, measuring 49.4 against 48.9 respectively. Uncertainty will continue to weigh on PMI data, at least until the EU and U.S. sign a trade deal, Boucher says. The report sends mixed signals to the European Central Bank: negative sentiment is weighing on businesses, while on the other hand inflationary pressures in the services sector are persisting, he says. (edward.frankl@wsj.com)

0645 ET - Saudi Arabia's planned output increases could soon push U.S. oil production to plateau due to lower oil prices, says Francisco Blanch, commodity strategist at BofA. Although the U.S. remains the largest oil producer, its production growth is expected to slow significantly this year and flatten in 2026 as a result of rising costs and reduced shale productivity. "U.S. shale players will soon have to start making some tough choices," Blanch says. "Lower capex will likely lead U.S. output to plateau because decline rates for all shale basins are pretty steep over 12-24 months." Brent crude and WTI currently trade 1.7% lower at $63.81 and $60.52 a barrel, respectively. (giulia.petroni@wsj.com)

(END) Dow Jones Newswires

May 22, 2025 19:23 ET (23:23 GMT)

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