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

0829 GMT - The Bank of England could come under pressure to increase interest rates following recent rate increases by central banks in the U.S., Japan and Europe, Tickmill Group's Patrick Munnelly says in a note. Concerns about high oil prices and inflation risks have caused major central banks to move towards rate rises. Markets price in three or more rate increases by each of the key central banks over the next year, LSEG data show. "Once the Fed, ECB and BoJ are all responding to the energy shock with tighter policy, it becomes harder for markets to believe the BOE can sit this cycle out," he says. (miriam.mukuru@wsj.com)

0750 GMT - The possibility of the Bank of England increasing interest rates in November remains due to inflation concerns as oil prices are still fairly elevated, Tickmill Group's Patrick Munnelly says in a note. The recent decline in energy prices hasn't been sufficient to alter market expectations of a BOE rate rise in November, he says. Investors price a 66% chance of a BOE rate increase at the November meeting, unchanged from last week, LSEG data show. "Unless Middle East diplomacy produces a material and sustained fall in energy prices, the market is likely to keep some probability of a November hike embedded," Munnelly says. (miriam.mukuru@wsj.com)

0742 GMT - Singapore inflation risks remain tilted to the upside, keeping the next central bank meeting live, ING economists say. Core inflation strengthened in August, and ING reckons it will accelerate further in the coming months as U.S.-Iran conflict uncertainty will likely keep global energy prices elevated. That boosts the risk of further pass-through into Singapore goods and services prices, ING's Deepali Bhargava says. A severe El Niño weather shock could also push up imported food costs--an acute pain point given Singapore's heavy reliance on imports. Robust AI-related investment activity could meanwhile stoke inflation on the services front. MAS surprised markets by tightening slightly in July, and ING doesn't rule out a further modest move in October. (fabiana.negrinochoa@wsj.com)

0721 GMT - Yields on U.K. government bonds, or gilts, drop as oil prices retreat, easing concerns about inflation. Brent crude falls 0.8% to $98.45 a barrel due to prospects of a U.S.-Iran deal after Kyodo News on Tuesday reported that Iran said it would reopen the Strait of Hormuz within seven days if the U.S. lifts its blockade. Ten-year gilt yields fall 1.4 basis points to last trade at 5.209%, Tradeweb data show. (miriam.mukuru@wsj.com)

0710 GMT - Bitcoin rises as risk sentiment improves on hopes for diplomacy in the Middle East conflict. President Trump said on Tuesday that U.S. officials had a "very good meeting" with Iran on the sidelines of the United Nations General Assembly in New York. Saudi Arabia, meanwhile, began running tests on its East-West pipeline on Tuesday in a step toward restoring flows as soon as this week after the pipeline was damaged by attacks earlier this month, the Wall Street Journal reports. Bitcoin rises 0.3% to $86,502, having reached its highest level since late January on Monday at $87,315, LSEG data show. (renae.dyer@wsj.com)

0650 GMT - Oil prices fall in early European trading on hopes for a diplomatic solution to the Middle East war and as Saudi Arabia began efforts to restart a critical pipeline. Brent crude slips 0.9% to $98.42 a barrel, while WTI futures are down 1.4% to $89.28 a barrel. President Trump on Tuesday told reporters that U.S. and Iranian delegations had "a very good meeting." Meanwhile, Saudi Arabia is running tests on its East-West oil pipeline as flows could be restored as soon as this week. "Markets are increasingly pricing gradual de-escalation, although geopolitical developments remain fluid and vulnerable to renewed tensions," analysts at brokerage Kotak Neo say. (giulia.petroni@wsj.com)

0640 GMT - The dollar rises to an almost eight-week high against a basket of currencies, driven by expectations the Federal Reserve could raise interest rates further. The market assigns a 53% chance of another Fed rate rise in October and prices 78 basis points by September 2027, LSEG data show. These expectations are overriding an easing of oil prices on hopes for a de-escalation in the Middle East conflict, which is usually negative for the currency given America's position as a net oil exporter. The DXY dollar index rises to a high of 100.763. (renae.dyer@wsj.com)

0639 GMT - U.S. Treasury yields and eurozone government bond yields fall in European opening trade as oil prices decline on the prospect of a deal between the U.S. and Iran. "Markets continue to err on the side of new momentum for diplomacy between the U.S. and Iran on breaking the energy-choking deadlock," analysts at KBC Bank said in a note. Investors await key input from flash estimate purchasing managers data for September. The 10-year U.S. Treasury yield falls 2.2 basis points to 4.944%, while the 10-year German Bund yield declines 1.3 basis pionts to 3.436%, according to Tradeweb. (emese.bartha@wsj.com)

0551 GMT - Bond markets could open in a reasonably good mood in Europe amid the prospect of diplomatic progress between the U.S. and Iran. This, along with Saudi Arabia moving to restart its East-West pipeline, has helped oil prices fall and reduce the upward pressure on bond yields. "Geopolitics remains center stage for markets," Jefferies' Mohit Kumar says in a note. "There is increased optimism that the U.S. and Iran may be moving towards some form of an agreement," the global economist says. (emese.bartha@wsj.com)

0500 GMT - Fitch Ratings expects the oil market to return to a substantial surplus in 2027. While it expects oil prices to fall next year, Fitch has raised its 2027 forecast for oil to US$70 a barrel from $65 a barrel to reflect the longer-than-anticipated Middle East conflict and the implications for the geopolitical risk premium. Analysts Brian Coulton and Alex Muscatelli acknowledge a high level of uncertainty around these projections. Assuming a deal between the U.S. and Iran takes shape in 1Q of 2027, supply and demand fundamentals could play a bigger role in determining oil prices. On the upside, geopolitical uncertainties could result in oil prices averaging $85 a barrel next year, while on the downside, a rapid recovery in supply could see prices fall to $55 a barrel, they say in a report.