Oil Prices Set to Keep Rising Even After Iran Conflict Ends, Shell Boss Says -- Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil is up 1.6% to $92.93 a barrel.

--European benchmark gas is up 2.6% to 50.05 euros a megawatt-hour.

--Copper futures are down 0.2% at $13,526 a metric ton.

--Gold futures are down 3% at $4,156.90 a troy ounce.

TOP STORY:

Oil Prices Set to Keep Rising Even After Iran Conflict Ends, Shell Boss Says

Prices of oil and gas will likely continue to rise beyond the current conflict-driven pressure as global demand continues to grow, the chief executive of oil major Shell said.

Upside pressure on prices will be a story for the longer term, Wael Sawan told the WSJ Leadership Institute CEO Summit on Wednesday. A price of around $60-$70 a barrel would keep the situation stable, he said.

OTHER STORIES:

Now Is a Good Time to Buy Into America's Mega Utility Merger

Shares of America's largest utility, NextEra Energy, have fallen about 9% since the company announced last month that it would buy Dominion Energy. This could be a good time to buy the dip on a top-notch utility.

NextEra said it would buy Dominion in a mostly stock deal, creating a giant that would be more than double the size by market capitalization of the next biggest utility. Dominion's shares were trading at such a discount-about a quarter lower than NextEra's forward earnings multiple-that the latter was able to offer a hefty premium without denting its earnings growth. NextEra expects the deal to be immediately accretive to its earnings per share.

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EU's Budget Watchdog Criticizes Energy-Spending Rule Change

The European Union's budget watchdog Wednesday criticized a move to exempt government spending on reducing the use of fossil fuels from the bloc's budget rules, saying it opens the way to a repeat of overspending following Russia's 2022 invasion of Ukraine.

The jump in prices of oil and natural gas since the conflict in the Middle East began in late February has highlighted the downsides of Europe's reliance on imported energy, with the bloc's economy set to slow in response to the increase in costs.

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Sempra Developing More Transmission Projects in Texas

Sempra is developing new transmission projects in Texas after gaining endorsement from the Electric Reliability Council of Texas.

The San Diego-based energy distributor said Wednesday that the sites will serve the southern Dallas-Fort Worth area.

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EnQuest to Buy Stakes in Malaysia Energy Assets for $833M

KUALA LUMPUR, Malaysia--British energy producer EnQuest is acquiring interests in four offshore production-sharing contracts in Malaysia for $833 million, expanding its presence in Southeast Asia.

EnQuest said it had reached farmout agreements with Petronas Carigali--the upstream unit of Malaysia's state-owned energy firm--and E&P Malaysia Venture.

MARKET TALKS:

Livestock Higher as Market Gauges Screwworm Threat -- Market Talk

1012 ET - A fluid situation with the spread of New World screwworm into the U.S. is being closely watched by the livestock market. Futures are higher in morning trade, with traders seemingly able to set aside NWS concerns in favor of more essential market fundamentals. But especially in the case of cattle, headlines could quickly change the direction of the market, says Joe Davis of Futures International in a note. "Markets remain highly sensitive to new developments," says Davis. Late yesterday, Mexican authorities announced a ban of the import of most U.S. livestock animals. Live cattle and lean hog futures both rise 0.6%. ([e-mail])

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Grains Higher Ahead of Thursday's WASDE -- Market Talk

0941 ET - CBOT grain futures are higher with traders covering shorts ahead of tomorrow's WASDE data, says the Hightower Report in a note. Only minor changes are expected in the WASDE, according to estimates from analysts surveyed by WSJ this week. Most-active CBOT corn is up 0.6%, while soybeans rise 0.6% and wheat climbs 1.5%. Also expected Thursday is Conab's crop report, updating the size and health of Brazilian crops. ([e-mail])

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Oil Futures Gain Following U.S. Retaliatory Strikes on Iran -- Market Talk

0933 ET - Oil futures are moderately higher after the U.S. conducted retaliatory strikes against Iran for the downing of an Apache helicopter, while President Trump warns Iran has taken too long to negotiate a deal and will have to "pay the price." The exchanges have injected little risk premium into the market, which is "more focused on the strong possibility of an interim deal that would at least partially reopen the Strait of Hormuz," Ritterbusch and Associates says in a note. "The market also appears to be pricing in some resiliency within world economies with a major oil spike having less impact on global growth than previously expected." WTI is up 1.2% at $89.29 a barrel and Brent is up 1% at $92.35. ([e-mail])

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Silver Pares Losses on More-Optimistic May Core Inflation Reading -- Market Talk

0914 ET - Today's May CPI report showed headline inflation up 4.2% from the prior year, in line with forecasts from analysts. But what's giving silver some support is monthy core CPI rising 0.2%, which is slightly below analyst expectations. "That tells investors underlying inflation pressure is cooling, even if the headline number is still sticky," says Waleed Said of GivTrade in a note following the report's release. Most-active silver futures are down 1.3% to $64.41 a troy ounce, paring steeper losses from before the report. Said says that the underlying figure is "broadly dollar negative," while supportive for precious metals. Gold is down 2.7% to $4,170/oz. ([e-mail])

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U.S. Natural Gas Futures Pick Up on Weather Outlook -- Market Talk

0903 ET - U.S. natural gas futures are higher as weather forecasts add some demand for coming days and weeks. "A firmer weather outlook for late June, which includes slightly above-normal temperatures blanketing essentially the entire contiguous 48, is providing support," Gary Cunningham of Tradition Energy says in a note. Building heat over coming days could drive more power-sector demand for gas with Texas electricity demand approaching a record, while temperatures of 90+ degrees in the Northeast could put an early season strain on power supply, he says. Nymex gas for July delivery is up 2.6% at $3.222/mmBtu. ([e-mail])

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Gold Falls Further as U.S. Inflation Heats Up -- Market Talk

1323 GMT - Gold prices extend losses after the latest U.S. data revealed higher energy costs stemming from the Iran war are continuing to push up inflation. In afternoon European trading, New York gold futures are down 2.5% to $4,178.40 a troy ounce, their lowest level since November. U.S. consumer prices rose at their fastest rate in three years, with inflation surging to 4.2% in May. Higher inflation, combined with signs that the labor market is on a more solid footing, is raising expectations of interest-rate hikes, which typically weigh on non-yielding assets like gold. ([e-mail])

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Oil Rises After Trump Warns Iran Over Prolonged Negotiations -- Market Talk

1152 GMT - Oil prices rise more than 1.5% after President Trump said Iran has taken too long to negotiate a peace deal and will now have to "pay the price." Brent crude is up 1.6% to $92.93 a barrel, while WTI futures rise 1.8% to $89.75 a barrel. Tensions in the region have escalated, threatening a fragile ceasefire as negotiations on the reopening of the Strait of Hormuz stall. The U.S. launched military strikes against Iran in retaliation for the downing of a U.S. Apache helicopter near the Strait of Hormuz, while Tehran launched missile and drone strikes on U.S. allies in the Gulf and Jordan. Still, the flare-up in tensions hasn't translated into any major spike, with Brent continuing to trade within a relatively narrow range. "Markets are directionless," says Kathleen Brooks from XTB. "There is a lack of anxiety in the oil market right now, even though a peace deal is unlikely in the current scenario." ([e-mail])

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Shell Expects Full Qatar Gas Facility Restart by End of First Quarter -- Market Talk

1057 GMT - Shell is hopeful it can get its Qatar gas facility back up and running by the end of the first quarter next year, Chief Executive Wael Sawan says at the WSJ Leadership Institute CEO Summit. The facility at the Ras Laffan complex was struck during the conflict between the U.S. and Iran. Shell has cleared the debris and ordered items to replace damaged components, he said. The facility houses two units, one of which wasn't struck and is available to start production, he added. The Pearl GTL is the world's largest gas-to-liquids plant. Shares trade flat at 3,180 pence.([e-mail])

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Palm Oil Ends Higher Amid Supply Concerns, Higher Exports -- Market Talk

1020 GMT - Palm oil ended higher on better exports and potential supply disruption. Malaysia's palm oil exports for June 1-10 are estimated to have risen 4.9% from the previous month to 376,971 metric tons, says cargo surveyor AmSpec Agri. According to the National Weather Service, the chances of an El Niño event emerging has now risen to 82% by end-July. Citi analysts estimate that an El Niño event will push crude palm oil prices 5% higher. CPO prices could also be supported in 2H by various global biodiesel mandates, they add. The Bursa Malaysia Derivatives contract for August delivery rose 11 ringgit to 4,539 ringgit a ton. ([e-mail])

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Gold Below $4,200 an Ounce On Middle East Fears -- Market Talk

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06-10-26 1113ET