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

1459 ET - Mizuho analysts downgrade a trio of California utilities after state lawmakers reject California Gov. Gavin Newsom's proposal to block insurance companies from suing utilities over wildfire claims. Newsom and lawmakers eventually came to a compromise on a narrower set of reforms that the analysts see as insufficient in shifting liability from utilities. And contrary to the analysts' expectation, lawmakers did not decouple utility liability from wildfire fund solvency, nor did they add a replenishment or evergreen funding mechanism, leaving investors no better off than before. "While the California utilities trade at very attractive valuations, we see limited catalysts," they say. Shares of PG&E and Edison International slide more than 18%, while Sempra falls about 3%. The analyst downgrade the stocks to neutral from outperform. (kelly.cloonan@wsj.com)

1454 ET - The kind of heavy oil with high sulfur content that the U.S. looks to secure with its Venezuela deal could be attractive to refiners either set up to process it, or if it's discounted enough to blend with lighter crudes, but there are problems, Mizuho's Robert Yawger says in a note. As Venezuelan production slid and relations with the U.S. deteriorated over the years, Canada filled the void and supplies U.S. refiners with 4 million barrels a day of heavy crude, he says. "No geopolitical mayhem. Every barrel arrives at the refinery on time." The U.S. already has the heavy oil it needs to meet diesel demand, and Venezuela will have little chance penetrating the U.S. market as long as cost of carry weighs heavily in Canada's favor. "It will be a tough sell," Yawger adds. (anthony.harrup@wsj.com)

1422 ET - Gold futures post back-to-back losses as a renewal of military action in the Persian Gulf follows what were seen as hawkish comments on Friday by Fed Chairman Kevin Walsh. "The metal could remain exposed to the geopolitical developments in the Middle East, where a rebound in oil prices could fuel inflation concerns again," Critical Metals CEO Tony Page says in a note. "Any softness in incoming inflation and labor data could ease the pressure, while firmer figures or more hawkish Fed comments may extend the decline." Front month gold settles down 1% in New York at $4,431.10 a troy ounce, while ending the month up 9.4%. Silver falls 1.2% to $66.221 a troy ounce, for a 15% monthly gain. (anthony.harrup@wsj.com)

1358 ET - CBOT wheat futures are now down 1.7%, after being off nearly 3% earlier. Wheat is generally lower on profit-taking, says Karl Setzer of Consus Ag Consulting. Traders settling books ahead of September is another factor. Helping pare the early losses are reports that Russian President Putin rejected a proposal for safe grain shipping lanes for wheat exports. Most-active corn is up 0.5%, while soybeans climb 0.2%. (kirk.maltais@wsj.com)

1202 ET - SLB's acquisition of Kelvion adds scale and breadth to its data-center business strategy, Melius Research analysts James West and Sanskriti Reddy say. The deal is expected to double SLB's revenue opportunity per gigawatt of delivered capacity. SLB's business was already on track to hit a $2 billion revenue run-rate or more by the end of 2027, the analysts say. Kelvion adds $1.2 billion to $1.3 billion of data center revenue alone, they note. SLB now anticipates data center revenue will be $4.5 billion to $5 billion, which the analysts say is roughly 10% of total company revenue. Shares are up 2.6%. (katherine.hamilton@wsj.com)

1158 ET - Oil flows through the Strait of Hormuz may be higher than initial vessel-tracking data suggest, as movements made without live signals can take days to confirm, commodities-data firm Kpler says. Recent estimates have varied widely, but Kpler says much of the divergence between tracked and official figures reflects differences in methodology and timing rather than missing barrels. Its tracked Hormuz clearance has averaged 8.6 million barrels a day since mid-June, while the latest seven days remain preliminary and typically revise higher as additional vessel movements are confirmed. (farhan.rafid@wsj.com)

1123 ET - Algonquin Power & Utilities' sale of its stake in Chilean water utility Suralis to Toesca for $126.5 million is a positive step toward streamlining its geographic footprint. Scotiabank's Robert Hope says the sale of its 64% stake supports "management's ongoing focus on its core U.S.-regulated utility operations." While the business represented about 4% of Algonquin's revenue, the analyst estimates the effects on EPS to be "neutral." It does, however, improve Algonquin's credit metrics, he adds. Hope thinks this might be the first of a number of other noncore divestitures, including "Bermuda utility (BELCO - $525m rate base) and smaller water utilities." (adriano.marchese@wsj.com)

1056 ET - European diesel refining margins have climbed to their highest levels in at least 15 years as the Middle East conflict, Russian export restrictions and looming U.S. refinery maintenance tighten an already constrained global products market, S&P Global Energy says. Disrupted flows through the Strait of Hormuz are also supporting crude prices and boosting demand for Middle Eastern medium sour grades. Morgan Stanley expects a more prolonged supply recovery than previously anticipated, leaving the oil market in deficit through the fourth quarter and first quarter of 2027, with Brent forecast to peak at $100 a barrel in the fourth quarter, versus $90.45 currently. (farhan.rafid@wsj.com)

1053 ET - Tanker freight rates have surged to historically high levels as restricted shipping through the Strait of Hormuz limits vessel availability six months into the Middle East conflict, S&P Global Energy says. Ship crossings through the waterway, which normally handles around 20% of global seaborne oil and LNG flows, have fallen by more than 80% since the U.S.-Iran war began on Feb. 28. The benchmark Middle East Gulf-Japan Long Range 2 tanker route hit an all-time high of $107.72 a metric ton on Aug. 27, according to Platts data. (farhan.rafid@wsj.com)

1051 ET - Dubai leads most major Gulf stock markets lower as renewed fighting between the U.S. and Iran adds to geopolitical uncertainty in the region. U.S. forces attacked two Iranian rocket launchers on Larak Island in the Strait of Hormuz on Sunday, marking the first American strike on Iran in weeks. The Dubai Financial Market General Index falls 0.8%, Qatar's QE Index drops 0.6%, Abu Dhabi's benchmark index declines 0.4% and Saudi Arabia's Tadawul All Share Index falls 0.3%. (farhan.rafid@wsj.com)

1011 ET - Canadian energy stocks lead the few gainers on the TSX after flare ups of fighting in the Middle East push oil prices higher. Crude oil is up 3% following U.S. strikes on Iranian rocket launch sites in the Strait of Hormuz. The higher price lifts Canada's major oil producers, with Vermilion Energy, Athabasca Oil, Strathcona Resources, Suncor and Cenovus among the top performs, rising 3.5%, 2.4%, 1.7%, 2.6% and 2.6%, respectively. The energy sector has experienced volatile trading in recent weeks as crude prices swing on shifting geopolitical tensions in the key oil-producing and exporting region. (adriano.marchese@wsj.com)

1003 ET - Gold futures are lower as U.S. strikes on Iranian targets push oil prices up, adding to the metal's losses seen Friday on Fed Chairman Kevin Warsh's inflation comments. "U.S. strikes near the Strait of Hormuz added a fresh headwind as oil rose, lifting inflation expectations," Kaynat Chainwala of Kotak Neo says in a note. "Direction from here stays tied to the Fed's rate path as further hawkish signals would extend the pullback, while a pause in yields could stabilize prices." Most active gold is off 1.3% in New York at $4,473.90 a troy ounce. Silver is down 0.9% at $67.16 a troy ounce.