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

1127 GMT - While an interest-rate hike by the European Central Bank next week seems likely, further tightening could pose growing risks to the eurozone economy, ING's Carsten Brzeski says in a note. The risk is heightened by surging bond yields, which are tightening financing conditions and putting pressure on public finances, he says. Higher bond yields can have an even greater impact on growth and inflation than equivalent policy-rate increases, Brzeski notes. With inflation largely driven by elevated energy prices rather than overheating demand, additional hikes would do little to address the underlying supply shock while increasing the danger of unnecessarily restrictive policy. "It's difficult to envisage the ECB being willing to risk a recession to tackle what is still a textbook supply-side shock." (don.forbes@wsj.com)

1122 GMT - The continued climb in gas prices amid escalating U.S.-Iran tensions and the increase in eurozone inflation to 3.3% in August cement a September rate hike from the European Central Bank, Ebury's Matthew Ryan says. Even so, a passthrough from the energy spike to underlying inflation was still conspicuously absent in August's data, he says. Core inflation declined to 2.4% from 2.5% in July, returning to its February level before the start of the Iran war. "While a September hike looks all but guaranteed, further tightening into restrictive territory beyond that is far from certain." That could keep a lid on further appreciation of the euro against the dollar, particularly given how aggressively markets are currently pricing in additional hikes, Ryan says. (edward.frankl@wsj.com)

1120 GMT - Markets increase their expectations of the Bank of England increasing interest rates in the coming months as oil prices surge. Brent crude oil last trades at $94.32 a barrel, notably higher than last week's levels, after the U.S. and Iran resumed hostilities over the weekend. Investors currently fully price in two quarter-point BOE rate rises by February 2027, and a potential third one by June, LSEG data show. Last week, markets were only fully pricing two BOE rate hikes by the end of 2027. (miriam.mukuru@wsj.com)

1115 GMT - Yields on U.K. sovereign bonds, also referred to as gilts, could stay elevated given high energy costs due to Middle East tensions, Aberdeen Investments' Matthew Amis says in a note. Ten-year gilt yields hit a 19-year high of 5.294% on Wednesday while 30-year yields increase to 5.921%, their highest since 1998, LSEG data show. High government borrowing costs will weigh on public finances, Amis says. "With gilt yields at these levels, the fiscal room for manoeuvre going into October's budget is incredibly limited." The U.K. budget is due on Oct. 28. (miriam.mukuru@wsj.com)

1104 GMT - Chevron is taking steps to more than double its production in Venezuela, planning to invest more than $7 billion in the country over the next five years. The company says Wednesday it has entered multiple agreements with the country, establishing updated terms with its joint ventures to support future investment, project development and production growth. The agreements came after President Trump last week said the U.S. reached a deal with Venezuela to secure control of a big chunk of the country's oil reserves. "With improved terms and additional acreage, we are strengthening a portfolio that we believe can deliver attractive low-cost oil growth, support energy supply and create differentiated long-term value," Chevron CEO Mike Wirth says. (connor.hart@wsj.com)

1023 GMT - Treasury yields continue to rise, with the 10-year yield hitting near three-year high, while the dollar reaches its highest in nearly three weeks as rising oil prices add to expectations for higher U.S. interest rates. "Federal Reserve Governor Michael Barr stated that he would support an interest-rate hike should inflation fail to moderate," Exness' Christopher Tahir says in a note. More comments like this from other Fed officials could further bolster yields and the currency, the strategist says. Middle East tensions add to this narrative, reviving inflation concerns, he says. The DXY dollar index rises to a high of 99.847. The 10-year Treasury yield reaches 4.818%, according to LSEG. (emese.bartha@wsj.com)

1022 GMT - Palm oil ended lower, tracking weakness in the soybean oil market, according to David Ng, a trader at Kuala Lumpur-based Iceberg X. Recent weakness in export performance also weighs on the vegetable oil's price, he says. Ng sees prices for palm oil supported above 4,900 ringgit a ton and resistance at 5,050 ringgit a ton. The Bursa Malaysia Derivatives contract for November delivery falls 13 ringgit to 4,970 ringgit a ton. (tracy.qu@wsj.com)

0902 GMT - BP's permanent appointment of interim chairman Ian Tyler isn't a surprise but might be seen as too conservative, AJ Bell's Dan Coatsworth says. "Tyler is more of a known quantity than his predecessor Albert Manifold, having joined BP's board nearly 18 months ago and sat in the chair's seat since Manifold's acrimonious departure in May," AJ Bell says. The appointment may be seen as too cautious, as Manifold's hiring as an outsider was to shake up the oil major. "The initial market reaction suggests Tyler's appointment hasn't sparked much in the way of excitement or disquiet, and CEO Meg O'Neill will hope it gives her the space and time to make the changes she wants at the business," Coatsworth adds. Shares are down 0.8%. (michael.hennessey@wsj.com)

0849 GMT - The oil market is increasingly pricing the cost of an unresolved war, Phillip Nova'a Priyanka Sachdeva says in a note. The latest disruption is no longer limited to military escalation, as reports of attacks on vessels passing through the Strait of Hormuz bring the risk directly into the physical oil supply chain, the analyst notes. The most feasible outcome now looks like stretched negotiations and prolonged trouble for oil flows, rather than a quick resolution, she says. The longer the disruption continues, the greater the risk that higher crude prices become embedded into inflation expectations and eventually into monetary policy decisions, Sachdeva adds. (sherry.qin@wsj.com)

0828 GMT - Diesel markets remain tight globally, particularly in the Atlantic Basin, says June Goh of Sparta Commodities. India and Northeast Asian countries are sending more fuel west to help ease shortages, but those shipments might not be enough to close the gap. Meanwhile, other refined products also remain elevated. With U.S. plants already running near full capacity, there is little spare capacity to replace lost production, leaving the market particularly exposed to disruptions. "The threat of any unplanned shutdowns including hurricanes has the potential to increase refined product cracks further," the senior oil analyst says. (giulia.petroni@wsj.com)

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.