Shell's Refining Margin Soars to Record High -2-

1344 GMT - UBS raises its December oil price forecast by $5 a barrel, citing continued declines in inventories and escalating attacks in the Strait of Hormuz, which have prompted markets to price in a higher geopolitical risk premium. The bank now expects Brent crude to reach $100 a barrel by year-end, while WTI is forecast at $96 a barrel. The outlook, however, remains highly uncertain, reflecting the unpredictable course of the conflict in the Middle East and the pace of recovery in Gulf production, UBS says. ([e-mail])

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Europe's Emergency Oil Stocks Release Might Not Provide Immediate Supply Boost -- Market Talk

1331 GMT - Europe's planned release of strategic oil stockpiles might not translate into an immediate boost to supply, says Giovanni Staunovo from UBS. Unlike in the U.S., European inventories are spread across hundreds of locations and managed by governments, central stockholding agencies and private industry. Releases are often carried out by reducing mandatory stockholding requirements--such as the number of days of net imports or domestic consumption that companies must hold--rather than by directly selling barrels into the market, the strategist says. The process is further complicated because some European countries store strategic stocks in other nations. "As a result, lower mandated stockholding requirements may not translate into a complete and immediate increase in supply to the physical market," Staunovo says. ([e-mail])

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Global LNG Markets to Remain Constrained Into 2027 -- Market Talk

1321 GMT - LNG markets are likely to remain tight into next year, with restricted Strait of Hormuz transit expected to constrain Qatar's exports until at least the first quarter, ANZ analysts say. Asia is bearing most of the demand adjustment, with higher LNG prices encouraging switching to coal in power generation and fuel substitution in industry, particularly in India and China. Europe, meanwhile, is relying more heavily on storage drawdowns and reduced industrial consumption to balance the market amid higher prices. A colder winter, weaker wind generation or stronger Chinese buying could intensify competition for LNG cargoes. "While the LNG market can absorb the loss of Qatari supply, the adjustment will be achieved through demand destruction, lower inventories and sustained high prices rather than a material increase in available supply," the analysts say. ([e-mail])

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Europe Can't Overlook Its Refineries -- Market Talk

1022 GMT - Europe's refining industry is key to the continent's energy policy, says Liana Gouta, director-general of industry group FuelsEurope. European Commission chief Ursula von der Leyen this week announced a strategic dialogue on European refineries, a move aimed at bringing down diesel costs and ensuring supply, including for Europe's defense industry. That launch is welcome, Gouta says. "We look forward to working with policymakers to ensure that competitiveness, security of supply and industrial transformation advance together, supported by a strong and resilient European refining sector," she says. Boosting refineries is a "long-term prerequisite" for Europe's climate, energy and industrial goals, says the group, whose energy-major members include ExxonMobil, BP, Italy's Eni and Norway's Equinor. ([e-mail]; @joshualeokirby)

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Palm Oil Futures End Lower on Weaker Soybean Oil Prices -- Market Talk

1012 GMT - Palm oil futures closed lower, weighed by weaker soybean oil and concerns about high domestic inventories, says David Ng, trader at Kuala Lumpur-based Iceberg X. Ng expects crude palm oil futures to find support at 4,500 ringgit a ton and face resistance at 4,650 ringgit a ton. The Bursa Malaysia Derivatives contract for December delivery fell 36 ringgit to 4,566 ringgit a ton. ([e-mail]; @ivy_jiahuihuang)

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Surging Tanker Rates Add Pressure to Fuel Prices -- Market Talk

1010 GMT - Elevated crude tanker rates are adding to already high fuel prices worldwide, ING's senior economist Rico Luman says. Tankers have repeatedly been targeted in key Middle East shipping lanes, with operators facing sharply higher insurance premiums. At the same time, demand for tanker capacity has surged as traders seek alternative routes and sources of supply. Transport costs for crude shipments from Ras Tanura in Saudi Arabia to Rotterdam, which stood at around $2 a barrel in 2025, surged above $35 a barrel in September, Luman says. Combined with strong refinery margins, these higher shipping costs could add more than $0.50 a liter to diesel prices at the pump. Although new tanker orders have increased, most vessels won't be delivered until 2028-29, leaving the market exposed to prolonged capacity constraints. ([e-mail])

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Repsol's Near Term Margins Deteriorate -- Market Talk

0956 GMT - Spanish energy major Repsol's strong update boasted record high refining margins but these have deteriorated into September and October, which could weigh on sentiment, RBC Capital Markets analyst Biraj Borkhataria writes. The third-quarter update suggests limited upgrades to consensus expectations, he adds. "We continue to see Repsol well placed relative to other refiners in Europe given its complexity and ability to adjust both crude and product slates to maximize margins," he says. Shares are up 0.2% to 28.83 euros. ([e-mail])

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Gold Slips Ahead of Fed Minutes -- Market Talk

0803 GMT - Gold prices fall as investors await the release of the Federal Reserve's meeting minutes for more cues on this year's inflation and monetary policy outlook. According to the FedWatch tool, traders are pricing in less than a 22% chance of further hikes this month. In early European trading, gold futures are down 0.6% at $4,159.90 a troy ounce. "Tuesday's advance to $4,180 was met with fresh selling as oil prices rebounded and long-end bond yields remained near multiyear highs," analysts at Saxo Bank say. Meanwhile, the U.S. dollar index is up 0.3% at 102.19, making dollar-denominated commodities more expensive for overseas buyers. ([e-mail])

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Oil Rises After Yemen's Houthis Strike Saudi Airports -- Market Talk

0757 GMT - Oil prices rise in early European trading, with Brent crude above $100 a barrel as attacks by Yemen's Houthi rebels on Saudi Arabia keep regional tensions elevated and threaten a recovery in exports. Brent is up 0.6% at $101.22 a barrel, while WTI futures are 0.5% higher at $89.89 a barrel. In their latest attack, the Houthis damaged two airports in southern Saudi Arabia, following a counteroffensive by Saudi-backed forces seeking to retake territory along the Red Sea. "There is a clear tug-of-war at the moment between improving supply from the region and lingering threats to supply," ING analysts say. According to Kpler, crude flows through the Strait of Hormuz fell to 74% of prewar levels following a series of attacks on tankers over the past week, although alternative routes kept Gulf exports broadly at prewar levels. ([e-mail])

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Shell's Update Is Fundamentally Supportive -- Market Talk

0758 GMT - Shell's continued strong oil and gas trading performance should be seen as a positive readacross to other large energy majors, J.P. Morgan's Matthew Lofting writes. The British energy major's third-quarter trading statement shows how it has been able to capture value amid the high and volatile price environment, he adds. Shares rise 0.5% to 3,668 pence.([e-mail])

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Oil Rises After Yemen's Houthis Strike Saudi Airports -- Market Talk

0757 GMT - Oil prices rise in early European trading, with Brent crude above $100 a barrel as attacks by Yemen's Houthi rebels on Saudi Arabia keep regional tensions elevated and threaten a recovery in exports. Brent is up 0.6% at $101.22 a barrel, while WTI futures are 0.5% higher at $89.89 a barrel. In their latest attack, the Houthis damaged two airports in southern Saudi Arabia, following a counteroffensive by Saudi-backed forces seeking to retake territory along the Red Sea. "There is a clear tug-of-war at the moment between improving supply from the region and lingering threats to supply," ING analysts say. According to Kpler, crude flows through the Strait of Hormuz fell to 74% of prewar levels following a series of attacks on tankers over the past week, although alternative routes kept Gulf exports broadly at prewar levels. ([e-mail])

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Shell's Integrated Model Shines -- Market Talk

0741 GMT - The full strength of Shell's integrated and trading business is on display, Barclays analyst Lydia Rainforth writes after the energy major's third-quarter trading update. Investor attention will now switch to the buyback, which could be $5 billion given its strong cash flow generation, she adds. Shares rise 0.5% to 3,668 pence. ([e-mail])

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Glencore ASX Listing to Come Amid Improving Performance -- Market Talk

0110 GMT - Glencore's ASX debut, due on Oct. 14, comes at a time of improving operational and financial performance for the miner, says UBS. Glencore's Ebitda jumped in FY 2026 and copper's contribution to earnings is rising, progressively reshaping its portfolio away from thermal coal, UBS says. "The Marketing division remains a key differentiator versus BHP and RIO, providing earnings diversification that can behave differently from mining operations through the commodity cycle," says the bank. Still, UBS says BHP remains the sector leader for earnings scale and durability. "Unlike peers where a larger proportion of future value creation is tied to project execution, BHP's earnings are predominantly generated by operations already running at scale, including the world's largest listed copper franchise and the sector's most profitable iron ore business," it says. ([e-mail]; @RhiannonHoyle)

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(END) Dow Jones Newswires

10-07-26 1151ET