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

0809 GMT - The euro weakens to its lowest in two weeks against a broadly stronger dollar as renewed Middle East hostilities increase energy prices. Rising oil and gas prices, in addition to increased expectations that the Federal Reserve could raise interest rates soon--potentially as early as this month--leave the euro vulnerable to further declines, ING's Chris Turner says in a note. The euro could extend its drop to $1.1520, while $1.1500 "looks an appropriate target for month-end," he says. The euro falls to a low of $1.1565, LSEG data show. (jessica.fleetham@wsj.com)

0752 GMT - Oil prices hold onto Tuesday's gains after the U.S. and Iran exchanged strikes overnight, clouding prospects for a near-term deal to reopen the Strait of Hormuz. "These latest developments have underscored the lack of a realistic path towards normalizing maritime traffic through the Strait," says Ricardo Evangelista from brokerage ActivTrades. "The absence of a credible timeline is increasing investor anxiety." In early European trading, Brent crude is up 0.3% to $94.91 a barrel, while WTI futures are flat at $90.19 a barrel. Escalating tensions are also keeping refined-product markets, especially diesel, extremely tight. Disruptions to Middle Eastern and Russian exports are pushing diesel refining margins to record levels, with strong seasonal demand and limited spare refining capacity likely to keep prices elevated and volatile, according to analysts. (giulia.petroni@wsj.com)

0734 GMT - The Middle East conflict, which has lifted oil prices back up to $95 in recent days, seems stuck in a phase where the tussle for control of Hormuz leads to recurring hostilities, nourishing the risk premium in oil prices, says Norbert Rucker, head of economics at Julius Baer. "While the conflict is enduring and is feeding energy markets with geopolitical uncertainties, oil and natural gas supplies proved surprisingly resilient so far," he says in a note. The Middle East is still supplying oil, except for Iran, he says. Overall, the oil market's fundamentals call for lower oil prices, he says. Julius Baer retains its cautious view and sees oil prices dropping into the $70s this year and into the $60s next year. (monica.gupta@wsj.com)

0728 GMT - European natural-gas prices surged to their highest level since the end of 2022 as escalating hostilities between the U.S. and Iran fuel worries about prolonged disruptions to energy flows. Dutch front-month futures--Europe's benchmark--rise 2.3% to 73.85 euros a megawatt-hour in early European trading, and are up 25% on the month. Increasing tensions in the Persian Gulf are clouding prospects for a recovery in regional LNG exports, adding to concerns over Europe's gas supply as storage levels trail seasonal norms. Europe is currently a more profitable destination for LNG cargoes than Asia once shipping costs are taken into account, according to analysts at ING. But as the winter approaches, "competition between the two regions is likely to pick up, particularly if Qatari LNG remains largely absent from the market through year-end." (giulia.petroni@wsj.com)

0712 GMT - Yields on U.K. government bonds, or gilts, rise further, with 10-year yields hitting their highest since 2007. The rise reflects concerns about the long-term U.K. fiscal outlook and inflation fears from high global energy prices, Manulife Investment Management's Hugo Belanger says in a note. Gilt yields climb in line with other developed-market government-bond yields, mainly due to inflation worries amid high energy costs. Gilt yields could stay high and volatile near term, Belanger says. "Risks are skewed to the upside if energy prices stay high, U.S. yields continue to rise, or the [U.K.] budget signals materially higher borrowing," he says. Ten-year gilt yields rise more than 5 basis points to 5.268%, LSEG data show. (miriam.mukuru@wsj.com)

0652 GMT - Eurozone bond yields rise in line with global bonds, as oil price and inflation worries dent market sentiment, pushing the 10-year German Bund yield to another 15-year high. "The 'highest since' narrative on global bond markets yesterday simply continued," KBC Bank analysts say in a note. "This time it was again mostly a further rise in energy prices due to a new intensification of the Iran conflict that served as the 'explanation' for the daily price action," they say. However, other factors, such as fiscal risk premia, abundant supply on bond markets, still play in the background, they say. The 10-year Bund yield rises to 3.381%, the highest level since 2011, according to LSEG data. (emese.bartha@wsj.com)

0556 GMT - Some form of a deal between the U.S. and Iran is still likely before the U.S. midterm elections in November, Jefferies' Mohit Kumar says in a note. "We are still optimistic that we would have some sort of a deal before the mid-terms," the global economist says. From Iran's perspective, President Trump is likely to be ready to give more concessions before the midterms, while from Trump's perspective, if he can secure a deal before the midterms, "it could potentially help in the odds for the Senate which is currently looking too close to call," Kumar says. (emese.bartha@wsj.com)

0531 GMT - Chinese solar producers are likely to remain under pressure from industry overcapacity, exacerbated by a steep drop in China's solar installations, says Morningstar's Cheng Wang in a note. LONGi Green Energy Technology and JA Solar Technology posted 2Q losses amid declining revenue. The analyst reduces his module shipment estimates for both producers and cuts his 2028-2030 net profit projections by 12%-13% for LONGi and by 18%-33% for JA. Still, he sees the worst is behind the Chinese solar sector, as government intervention and market forces may alleviate oversupply. Morningstar trims its fair-value estimate for LONGi by 5% to 16.50 yuan and reduces JA's by 15% to 12.40 yuan. LONGi shares last 2.2% lower at 11.80 yuan, while JA shares decline 2.6% to 6.85 yuan. (megan.cheah@wsj.com)

0521 GMT - Higher energy prices contributed to the recent bond selloff but the market isn't in panic mode, Allianz Research analysts say in a note. "Renewed tensions in the Middle East since July and destructions of refining capacity in Russia have raised energy costs in particular gas prices again, leading to higher inflation and central bank expectations (Federal Reserve terminal rate +35bp, European Central Bank +50bp) explaining the lion's share of rate increases," they say. While sovereign bond yields have risen since July, again reaching multi-year highs, the speed of increase was lower than after the start of the U.S.-Iran war, they say. "Bond markets are still functioning well according to bid-ask spreads or auction demand, but elevated rate levels are rightfully raising debt sustainability concerns."