Oil Eases, With OPEC+ Supply and Geopolitical Risks in Focus — Market Talk

Gold prices ease slightly in early trading after pushing closer to the $4,000 mark, as the U.S. government shutdown enters its seventh day with no resolution in sight. Futures are down 0.1% at $3,973.40 a troy ounce after reaching $3,977 earlier in the session. The U.S. dollar index trades 0.2% higher at 98.34. The shutdown has added uncertainty to financial markets, delaying the release of U.S. economic data that is crucial for the Federal Reserve's decision-making. However, traders still price in two more interest-rate cuts this year. Meanwhile, political jitters in France and persistent geopolitical risks continue to boost safe-haven demand. Goldman Sachs raises its December 2026 gold price forecast to $4,900 an ounce from $4,300 previously, citing ETF inflows and central bank buying. (giulia.petroni@wsj.com)

European natural gas futures climbed to a six-week high of €33.5 per megawatt hour on Tuesday, extending a 5.3% rally from the previous session, the largest daily gain since June 19, as colder weather forecasts stoked expectations of stronger heating demand.

Temperatures in France and Germany are projected to be about 2°C below seasonal norms from mid-October, while weaker renewable generation is set to add pressure on gas consumption.

At the same time, Russia’s largest wave of attacks on Ukraine’s gas infrastructure since the start of the war raised concerns over potential supply disruptions and the need for greater European gas exports to Ukraine this winter.

Still, storage levels across the continent remain healthy ahead of the heating season, with EU inventories at 82.8% of capacity, including Italy at 93%, France at 92%, and Germany at 76.3%.

By Anthony O. Goriainoff

Hochschild Mining said subsidiary Tiernan Gold signed a definitive agreement to buy Railtown Capital in a reverse takeover.

The gold-and-silver miner on Tuesday said that as part of the agreement it will raise a minimum of 35 million Canadian dollars ($25.1 million) via a private placement for Tiernan. The London-listed company said the proceeds will be used for the development of Chile's Volcan gold project.

The companies signed a preliminary agreement in September.

Hochschild said it intends to sell part of its investment in Tiernan via a secondary sale of its holding, resulting in additional liquidity in the trading of New Tiernan's common shares on Calgary's TSX Venture Exchange.

The company said that on completion, Railtown will change its name to Tiernan Gold Corp., and that independent nonexecutive director Jill Gardiner will also serve as its chair.

Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com

By Najat Kantouar

Naturgy said it would sell around 3.5% of its share capital for around $1 billion to qualified investors in a placing.

The Spanish natural-gas utility said Tuesday it would sell 34.1 million shares at 25.90 euros ($30.34) each, amounting to around 883.2 million euros ($1.03 billion). The placement price represents a 3.9% discount to Monday's closing price of 26.94 euros.

Upon the completion of the process on or around Thursday, Naturgy expects to be left holding around 9.1 million treasury shares, or 0.94% of shares compared with 4.5% beforehand.

Write to Najat Kantouar at najat.kantouar@wsj.com

By Adam Whittaker

Shell said it expects to report significantly higher third-quarter earnings from trading in its integrated gas division, while a rise in refining margins will provide some offset to weaker oil prices.

The update comes after a second-quarter where adjusted earnings fell nearly 25% due to lower oil prices and weaker earnings from its integrated gas unit, which was hit by volatile prices triggered by geopolitical developments.

The British energy giant said Tuesday that adjusted earnings in its core integrated division will be boosted by a significantly higher trading and optimization performance. In the second quarter the unit reported $1.74 billion after traders were wrong-footed by volatility.

Oil prices have remained under pressure from a hazy macroeconomic outlook and fears of a potential supply glut hitting the market as major oil-exporting countries increase production. Tensions in Eastern Europe and the Middle East have provided some support but low prices are dragging on sector earnings.

Shell increased the lower range of its upstream guidance, and now expects output of crude oil and natural gas to be 1.79 million to 1.89 million oil-equivalent barrels a day, which compares with its previous guided range of 1.70 million to 1.90 million oil-equivalent barrels a day.

Shell also expects a boost from refining margin with a climb to $11.6 a barrel from $8.9 a barrel in the previous quarter.

Analysts at Berenberg wrote late September that higher refining margins across the sector should offset weaker upstream performances over the third quarter and beyond.

Shell, however, flagged a $200 million to $400 million net cash outflow in its upstream division, which will drag on earnings as it pays partners in the Tupi field, Brazil, to better reflect total oil production across the block.

Investor attention is turning to the sustainability of shareholder returns and the strength of integrated oil companies' balance sheets. This follows years of high profits that have allowed oil and gas producers to splurge on cash handouts to shareholders through dividends and buybacks.

Last week TotalEnergies cut its quarterly buyback guidance to better reflect weak oil prices. The strength of Shell's balance sheet and ability to generate sufficient free cash flow to cover returns on lower oil prices relative to peers means its buyback has been regarded by analysts as one of the safest in the sector, and analysts expect it to maintain its $3.5 billion quarterly buyback alongside its third-quarter results.

Shell trimmed the upper range of its integrated gas production guidance to between 910,000 and 950,000 oil-equivalent barrels a day for the third quarter. This compares with 913,000 in the previous quarter and the 910,000 to 970,000 oil-equivalent barrels a day it had previously guided for.

Volumes of liquefied natural gas are expected between 7 million and 7.4 million metric tons after the company narrowed and slightly raised the upper range of its guidance from 6.7 million to 7.3 million metric tons.

Write to Adam Whittaker at adam.whittaker@wsj.com

Newcastle coal futures fell below $105 per ton, extending this month’s losses and retreating further from the three-week high reached in late September, as new data showed renewable energy overtook coal in global electricity generation for the first time in history.

In the first half of 2025, solar and wind power not only met but exceeded global electricity demand growth, leading to a modest decline in fossil fuel use from a year earlier.

The trend aligns with the International Energy Agency’s projection that global clean energy capacity will double by 2030 to 4,600 gigawatts, roughly equivalent to the combined output of China, the EU, and Japan.

Still, experts cautioned that such growth may fall short of meeting the world’s rapidly rising electricity needs.

On the supply front, China’s thermal coal production remained 3% higher year-to-date through the first eight months of 2025.