European Oil Stocks Drop on Falling Prices Ahead of Trump-Putin Meeting — Market Talk

By Jamie Chisholm

Gold bullion can be seen after being removed from casts.

The price of gold fell sharply as investors bet that a tariff on bullion entering the U.S. was less likely, and haven demand for the metal waned on hopes for a Ukraine-Russia ceasefire.

The front-month gold futures contract on the NYMEX exchange fell 2% to $3,418 an ounce in early Monday trading.

Gold futures (GC00) jumped to a record high above $3,500 last week after dealers were blindsided by a report that U.S. Customs and Border Protection said that 1-kilo and 100-ounce gold bars should be classified under a customs code that subjects them to tariffs.

The price of gold had already risen around 30% this year as concerns about U.S. economic policy uncertainty encouraged central banks to buy the precious metal.

However, late on Friday, Bloomberg reported that the Trump administration suggested it would issue a new policy clarifying that imports of gold bars should not face tariffs. Gold futures fell on the news and have continued that decline into Monday's session.

Also possibly weighing on the yellow metal's price, according to analysts, are hopes for a ceasefire in the Ukraine-Russia war ahead of a meeting on Friday in Alaska between U.S. president Donald Trump and and Russia president Vladimir Putin.

-Jamie Chisholm

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Gold futures slump, reversing gains made in the prior session on persistent tariff uncertainty. Futures are down 2.1% at $3,418.30 a troy ounce, having hit an all-time high of $3,534.20 on Friday after confusion over a possible U.S. tariff on the precious metal. U.S. customs authorities had supposedly classified kilogram and 100 ounce bars as subject to import tariffs, though the White House said it would issue a clarification on the matter. The ruling, which contradicts an earlier exemption in April, could disrupt global gold trade flows and the U.S. future market, MUFG analysts say in a note. Markets are now turning attention to Tuesday's inflation data for hints on the U.S. Federal Reserve's pathway towards monetary policy easing, as lower interest rates typically boost non-interest bearing bullion's appeal, MUFG adds.(joseph.hoppe@wsj.com)

By Dominic Chopping

Orsted shares slumped after the company halted plans to sell a stake in a U.S. offshore wind project and proposed a rights issue that could raise $9.4 billion as it seeks fresh funds to continue its offshore wind construction projects.

Shares were 24% lower in early European trade, nearing an all-time low.

The decision comes after developments in the U.S. wind market disrupted the Danish renewable-energy company's asset sale plans.

Orsted said Monday that it planned to offer new shares to existing shareholders, with the Danish state as the majority owner committing to subscribe for its pro rata share, to raise gross proceeds of 60 billion Danish kroner ($9.36 billion).

The company has faced a challenging time since it made an aggressive push into the U.S. offshore wind market. Having struggled with supply-chain bottlenecks, higher interest rates and trouble getting tax credits, it launched a restructuring last year after deciding to pull out of two high-profile wind projects off the coast of New Jersey.

The plan includes a comprehensive divestment program to free-up funds for investments in its most financially attractive projects, ensure a stronger balance sheet and support a solid investment grade rating.

As part of those plans, Orsted planned a partial sale of its Sunrise Wind project off the coast of New York that has previously faced supply chain and construction challenges that resulted in hundreds of millions of dollars in impairments.

The industry also faces headwinds from a Trump administration that is opposed to wind energy, with President Trump suspending new federal wind leases shortly after his inauguration. Trump's tax-and-spending bill will see a phasing out of renewable energy tax credits while he has slapped tariffs on EU imports that include hefty duties on steel and aluminum.

The company said that following the recent material adverse development in the U.S. offshore wind market, it's not possible to complete the planned partial divestment and associated funding of Sunrise Wind on favorable terms. That means Orsted will have to fund the entire project construction itself, leading to a funding requirement of 40 billion kroner.

"Given the unprecedented regulatory development in the U.S., we have made a comprehensive assessment of all options," said Chair Lene Skole. "The rights issue will strengthen Orsted's capital structure and provide financial robustness in the years 2025 through 2027, during which we'll deliver on our 8.1 gigawatt offshore wind construction portfolio."

Proceeds of the rights issue will be used to cover funding requirements from a full ownership of Sunrise Wind, strengthen the capital structure, provide flexibility in offshore partnerships and divestments and boost resources to pursue opportunities in core offshore wind markets in Europe and select markets in Asia Pacific.

An extraordinary general meeting will be called for Sept. 5 to approve the rights issue.

It said separately that it maintains full-year guidance for earnings before interest, taxes, depreciation and amortization excluding earnings from new partnership agreements and impacts from cancellation fees of between 25 billion and 28 billion kroner.

It lifted its investment plans for the years between 2025 and 2027 to 145 billion kroner from 130 billion kroner and expects to report Ebitda excluding new partnerships and cancellation fees in excess of 28 billion kroner in 2026 and in excess of 32 billion kroner in 2027.

It reported second-quarter Ebitda excluding new partnerships and cancellation fees of 5.34 billion kroner, up from 5.27 billion kroner a year prior and versus a FactSet consensus of 4.81 billion kroner.

Write to Dominic Chopping at dominic.chopping@wsj.com

Iron ore futures rose to around CNY 786 per tonne on Monday, rebounding from a near four-week low amid fresh signs of robust demand from China.

Data showed the country’s iron ore imports in July climbed 2% from a year earlier, coming in well above the average monthly volume so far this year.

Market participants noted that restocking activity from Chinese steel mills, supported by healthy profit margins and relatively low inventories, continued to underpin prices.

At the same time, a Chinese consultancy reported that several steel mills had been instructed by authorities to temporarily suspend production later this month as part of efforts to reduce air pollution.

Meanwhile, seasonal declines in consumption persist, with extremely high temperatures and heavy rainfall significantly disrupting downstream construction activity, which in turn has contributed to an accumulation of steel inventories.

Oil prices fall in early trade as traders await President Trump and Russian President Vladimir Putin's meeting in Alaska later this week. Brent crude is down 0.7% at $66.13 a barrel, while WTI is down 0.8% at $63.36 a barrel. "President Trump's deadline for Russia to strike a peace deal with Ukraine passed without stricter U.S. sanctions imposed on Moscow," ING analysts say. "This likely contributed to the recent weakness in crude oil prices, with Brent trading at its lowest levels since early June." The latest positioning data shows that speculators scaled back their bets that Brent prices will rise despite supply risks from sanction threats, according to ING. Oil prices are also pressured by concerns over the global demand outlook as Trump's tariffs on imports of dozens of trade partners are expected to weigh on the economy. (giulia.petroni@wsj.com)

European natural gas futures fluctuated around €32.5/MWh, hovering near a two-week low, as markets weighed rising temperatures against strong supply and easing geopolitical risks.

Higher temperatures this week could drive cooling demand and Electricite de France SA warned it may be forced to curb nuclear output due to high river temperatures.

Still, gas storage across the continent continues to build steadily, supported by subdued demand from Asia, particularly China, and robust pipeline deliveries from Norway.

LNG imports also remain solid, exceeding seasonal norms. EU storage levels are near 72%, compared to 87% at the same time last year, with Germany above 64%, Italy over 83%, and France around 80%.

Meanwhile, traders are watching prospects for a Russia–Ukraine peace deal, with Donald Trump set to meet Vladimir Putin on August 15 in Alaska.

A breakthrough could lift sanctions on Russian oil exports, boosting global supply and reducing risks to global energy flows.