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

0902 ET - CBOT grain futures continue to take their cue from crude this week, with both sliding as optimism builds for a diplomatic solution to end the U.S.-Iran conflict. Because row crops like corn and soybeans are used as feedstock for renewable fuels, they're exposed to crude oil price moves, making today's 2% fall in oil futures a pressure point. "Trump says the U.S. and Iran are having good talks and optimism towards a peace deal being worked out has increased," say analysts with AgMarket.net in a note. CBOT soybeans are down 0.4% premarket, and wheat falls 0.8%, while corn remains up 0.3%. (kirk.maltais@wsj.com)

0856 ET - Gulf economies are receiving near-term support from elevated oil prices, but prolonged regional uncertainty threatens longer-term private-sector growth. Higher oil prices are supporting fiscal and external revenues in Saudi Arabia, the United Arab Emirates and Oman despite risks that prolonged uncertainty could weaken business confidence, private-sector activity and foreign direct investment, S&P Global Ratings says in a report. The ratings agency says easing export obstructions could also benefit Kuwait, Bahrain and Qatar, while Oman is well-positioned to capture trade through more secure maritime routes and Dubai's Jebel Ali port could face higher operating costs. (farhan.rafid@wsj.com)

0843 ET - Treasury yields take another step lower as hostilities remain suppressed in the Strait of Hormuz. Oil prices keep falling, with Brent down 2%. The WSJ Dollar Index is flat. The Conference Board Consumer Confidence Index for July is expected to tick higher to 92 from 91.2, according to a WSJ consensus. Markets are mostly pricing in a Fed hold tomorrow, but odds of a hike are still relatively high, at 36% on the CME's FedWatch tool. Inflation-linked swap rates indicate investors expect inflation to be below the Fed's 2% target a year from now. The 10-year yield slips to 4.631% from yesterday's 4.640% settle. The two-year declines to 4.302% from 4.318%. (paulo.trevisani@wsj.com; @ptrevisani)

0833 ET - Supply disruptions from the Iran war are accelerating competition among Gulf states as they pursue national energy strategies. The United Arab Emirates is seeking to raise oil production toward capacity following its exit from OPEC, while Qatar is moving ahead with expansion of liquefied-natural-gas production from its North Field, S&P Global Ratings says in a report. The moves signal a more aggressive effort by Gulf governments to generate returns from their natural-resource endowments, the ratings agency says. (farhan.rafid@wsj.com)

0832 ET - French consumer confidence firmed in July, completing a strong start to third-quarter survey data after pickups in the PMIs and Insee business confidence, Pantheon Macroeconomics' Claus Vistesen says in a note. The headline index rose to 86 from 84 in June, lifted by improvement in households' outlook for their own financial situation and the economy. Major purchasing intentions also climbed, though the survey's savings index rose as well, Vistesen notes. Since the survey period, however, airstrikes have resumed in Iran and energy prices have rebounded. Moreover, France is now also grappling with major forest fires, which are likely to weigh on household confidence in affected regions, and on sentiment in tourism and hospitality, he says. (edward.frankl@wsj.com)

0826 ET - Oil futures extend losses to a third session as the U.S. and Iran continue a pause in their attacks while Iran and Oman explore ways to reopen the Strait of Hormuz. The prospect of a diplomatic off-ramp could keep crude under pressure, although risk premium could be quickly reignited and push prices back above $100, says Nikos Tzabouras of Tradu. "The Middle East conflict has in fact widened," he says, with Houthis attacking Saudi facilities and shipping in the Red Sea. "Any sustained disruption there could leave a market already running on low inventories with limited room to respond." WTI is down 1.3% at $81.55 a barrel and Brent is down 1.6% at $86.96. (anthony.harrup@wsj.com)

0724 ET - Market pricing of around 1.5 interest-rate hikes by the European Central Bank this year might be excessive, providing some cushion to German government bonds in case of renewed oil price rises, Metzler analysts say in a note. One-and-a-half rate raises would mean interest rates would rise by 37 basis points, according to LSEG. Metzler expects fewer interest-rate hikes than that. "We see support for the entire curve stemming from monetary policy with the greatest impact, naturally, at the short end," analysts Leon Ferdinand Bost and Yannik Mosbach say. Short-term yields have somewhat decoupled from the oil price and consequently Metzler sees a certain "margin of safety" against rising Brent prices, they say. The ECB raised interest rates in June and left them on hold in July. (emese.bartha@wsj.com)

0704 ET - Saipem's margin visibility is being hampered by costs linked to the U.S.-Iran war, Equita analyst Massimo Bonisoli writes. In second-quarter results posted Tuesday, the Italian engineering contractor cut its guidance for 2026 adjusted earnings before interest, tax, depreciation and amortization from 1.9 billion euros to around 1.75 billion euros. Costs incurred in the Middle East, where Saipem builds and operates offshore oil and gas facilities, contribute to the guidance cut, the analyst writes. The company's expectations for performance in the second half of the year look modest, Bonisoli says. Saipem shares fall 8.3%, dragging on Luxembourgish peer Subsea 7, which falls 7%. (josephmichael.stonor@wsj.com)

0654 ET - Kuehne + Nagel is delivering the benefits of artificial intelligence, but shares trade at an elevated level, Deutsche Bank analyst Harishankar Ramamoorthy writes. The company's second-quarter EBIT beat consensus by around 8% and full-year guidance was upgraded. Management also highlighted 100 million-150 million Swiss francs of AI-driven productivity benefits by the end of 2027. However, markets treated this as slightly underwhelming, given the AI benefits are gross, not net of costs, and it was unclear how costs could evolve in the future, the bank says. Management also mentioned the benefits could be passed on to clients to gain market share. Deutsche Bank lifts its target price for the stock to 196 francs from 183 francs and reiterates its hold rating. Shares rise 0.5% to 202.70 francs. (dominic.chopping@wsj.com)

0639 ET - German economic output rose somewhat in the second quarter despite headwinds from the war in Iran, the Bundesbank says in its July monthly report. "The current picture painted by the indicators suggests a somewhat higher underlying pace of economic growth than was expected in the Bundesbank's June forecast," it says. Continued resilience in the industrial sector, helped by robust foreign demand and growing exports helped GDP to increase slightly in the quarter, the bank says. German exporters also benefited as international competitors were more severely affected by supply bottlenecks. Consumers were relatively unaffected by the high energy prices, and have kept their consumer spending at least stable, it notes. German 2Q GDP data are due Thursday. (edward.frankl@wsj.com)

0635 ET - U.S. Treasury yields fall as oil prices drop and investors hope for a diplomatic solution in the Middle East. The dollar rises to a one-month high against a basket of currencies before Wednesday's Federal Reserve's rate decision and on safe-haven demand as a tech-stock selloff deepens. The Fed is expected to hold interest rates but could stress inflationary risks from high energy prices, while a hike isn't out of the question. "The Fed will have no choice but to strike a hawkish note on Wednesday," Ebury's Matthew Ryan says in a note. Money markets price a 34% probability of a Fed rate hike, according to LSEG. The 10-year Treasury yield falls 1.9 basis points to 4.622%, according to Tradeweb. The DXY dollar index hits a high of 101.640. (emese.bartha@wsj.com)

0627 ET - The cost of insuring euro-denominated credit against default declines as U.S. and Iran pause hostilities. Markets hope for a resolution to the conflict and the reopening of the Strait of Hormuz. "Oil's sharp drop after the U.S. paused military strikes against Iran suggests investors are becoming more confident that diplomacy can prevent a prolonged disruption to global energy supplies," eToro's Lale Akoner says in a note. The iTraxx Europe Crossover index of euro high-yield credit default swaps falls 1 basis point to 260bps, S&P Global Market Intelligence data show.