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

0701 GMT - Oil prices climb more than 1.5% after four consecutive sessions of losses, with investors turning their attention to the prospect of U.S.-Iran diplomatic talks on the sidelines of the U.N. General Assembly. In early European trading, Brent crude rises 1.6% to $101.97 a barrel, while West Texas Intermediate futures gain 1.7% to $97.40 a barrel. The rebound comes as traders weigh the potential for a diplomatic breakthrough against persistent risks to physical supply in the Middle East. Those risks remain elevated after another tanker was struck in the Strait of Hormuz, according to the UKMTO. Meanwhile, Houthi attacks in the Red Sea complicate efforts by Gulf producers to reduce their reliance on Hormuz. (giulia.petroni@wsj.com)

0626 GMT - U.S. Treasury yields open higher in European trade after a pause in trading in Asian hours as the Tokyo market is closed. The driver is an increase in oil prices, even as investors look out for some diplomatic progress between the U.S. and Iran with the possibility of a meeting between the presidents of both countries at the UN meeting. Regarding a Trump-Xi summit, "for markets, the big question is what's going to happen when the current one-year trade truce expires in November, and whilst the general tone remains positive, there still isn't an agreement yet," Deutsche Bank strategists say in a note. The 10-year Treasury yield rises 1.9 bps to 4.981%, according to Tradeweb. (emese.bartha@wsj.com)

0619 GMT - The Federal Reserve is expected to raise rates once more in December, BNY's John Velis says in a note. BNY is less sure whether the Fed can proceed with as many interest-rate hikes in 2027 as the market has priced in, the Americas macro strategist says. "The answer hinges on how effective tighter policy can be given the current inflation shock," he says. Much revolves around the situation in the Middle East, where visibility is low, he says. "A pullback in tensions--and the lower oil prices that would follow--would likely change the markets' and the Fed's calculations," Velis says. But being beholden to a situation that could worsen before it improves isn't a tenable stance, he adds. (emese.bartha@wsj.com)

0550 GMT - Global bond markets are likely to focus on the prospect of diplomatic progress between the U.S. and Iran at the U.N. meeting in New York with President Trump's speech on the agenda. Trump has signaled readiness to meet Iranian President Masoud Pezeshkian. The recent fall in oil prices helped bond yields decline. Brent is higher on Tuesday and was last up 1.4% at $101.75 per barrel. On Monday, the 10-year U.S. Treasury yield closed at 4.949%, while the 10-year German Bund yield ended at 3.455%, according to LSEG. (emese.bartha@wsj.com)

0541 GMT - BP shouldn't prioritize an immediate increase in shareholder returns, including a resumption of the quarterly buyback, Barclays analyst Lydia Rainforth writes in a note about the British energy major's improving financial outlook. Instead, BP's management should continue to focus on operational execution, she says. Securing the financial and operational performance over the next year is the best way for management to create long-term shareholder value, she says. Once this is done and debt worries are gone, the case for higher returns becomes a lot stronger, she say. Shares closed Monday at 542.90 pence. (adam.whittaker@wsj.com)

0533 GMT - BP could soon be in a materially stronger financial position faster than some investors expect, Barclays analyst Lydia Rainforth writes. War-induced high oil prices, exceptional refining margins and simplification efforts help BP's deleveraging efforts, she says. Prices and margins are higher than when BP set out guidance for the second half of the year, she says. Barclays sees BP's total net debt obligations falling to between $36 billion and $40 billion by the end of the year, from $54 billion at the end of the second quarter. Alongside falling gearing, this would contribute to BP's financial reset and help rebuild investor confidence, she says. Shares closed Monday at 542.90 pence.