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

1052 GMT - U.S. diesel prices continue to reach new highs, hitting a fresh record Tuesday as curtailed Russian exports and prolonged disruptions to crude flows in the Strait of Hormuz squeeze global supplies. The national average price of diesel rose to a record of $6.527 a gallon, according to the American Automobile Association, up sharply from $3.688 a gallon a year ago. According to a Bloomberg report, Russia is set to extend a ban on most diesel exports that was introduced earlier this year due to continued Ukrainian attacks on its refineries. "The diesel market is likely to face a challenging winter if the situation in the Middle East does not ease and Russia's ban on diesel exports remains in place for even longer," says Carsten Fritsch from Commerzbank. (giulia.petroni@wsj.com)

1053 GMT - European utilities' earnings will benefit from higher-for-longer natural gas prices on the continent, Bank of America analysts write. Continuing disruption in Qatar, increased demand in Asia and low storage levels in Europe will combine to keep benchmark European natural gas prices at 55 euros a megawatt hour in 2027, the analysts say. Markets are underestimating the impact on utilities' companies EPS by around 6%-9%, the analysts say. European governments could impose lower power price caps, but levels will likely be above prices set in the 2022 energy crisis, the analysts say. SSE and RWE are both likely to deliver strong results in November, they say. A basket of European utilities stocks rise by 0.1%. (josephmichael.stonor@wsj.com)

1020 GMT - European stocks linked to the buildout in artificial intelligence are undervalued compared to their American peers, UBS strategists Gerry Fowler and Sutanya Chedda write. Investors are buying U.S. AI stocks at high valuations, while leaving European suppliers building AI capacity comparatively unloved, they say. The strategists split the AI supply chain into three tiers. Tier one companies sell directly to so-called hyperscalers, while tiers two and three are at steps removed from hyperscaler spending. Companies across all three tiers will outperform the market, they say. Electricity infrastructure group Prysmian, German industrials giant Siemens and vacuum valves-producer VAT Group are all in different tiers, but will each benefit significantly from AI expansion, the strategists say.(josephmichael.stonor@wsj.com)

1017 GMT - Yields on U.K. government bonds, or gilts, fall as oil prices decline following a media report that Iran offered to reopen the Strait of Hormuz. According to Japan-based Kyodo News, Iran said it would reopen the oil shipping lane if the U.S. takes the first steps toward easing military pressure. The news caused the Brent crude price to fall 2.2% to $98.14 a barrel, calming inflation concerns. Ten-year gilt yields fall 3 basis points to last trade at 5.172%, a two-week low, LSEG data show. (miriam.mukuru@wsj.com)

1013 GMT - Brent crude falls below $100 a barrel on hopes for a diplomatic push to end the U.S.-Iran war. The global oil benchmark is down 1.2% to $99.11 a barrel, while the U.S. oil gauge WTI is down 2.7% to $93.20 a barrel after Japan's Kyodo News reported that Iran has proposed to reopen the Strait of Hormuz within seven days if the American blockade is lifted. "The report triggered fresh selling, as traders read it as a fresh de-escalation signal ahead of this week's U.N. General Assembly," says Kaynat Chainwala from Kotak Securities. "Until a concrete outcome emerges from this week's meetings, crude's risk premium looks vulnerable to further unwinding, though stalled talks could just as quickly reverse the move." (giulia.petroni@wsj.com)

0914 GMT - The dollar briefly hits a seven-week high against a basket of currencies before paring gains as oil prices swing. Crude prices turn lower after Japan's Kyodo News said Iran offered to reopen the Strait of Hormuz within seven days if the U.S. takes steps toward easing military pressure. An earlier rise in oil prices, which reflected continuing shipping risks, had lifted the dollar due to the U.S.'s position as a net oil exporter and the currency's safe-haven role. Meanwhile, markets are betting on further U.S. interest-rate rises after the Federal Reserve raised rates by a quarter point last week and signaled further moves. The DXY dollar index rises 0.1% to 100.514 after reaching as high as 100.667 earlier. (renae.dyer@wsj.com)

0743 GMT - European energy stocks post slight gains in early morning trade as oil prices halt their decline. Risks to shipping through the Strait of Hormuz remain elevated. A tanker entering the strait was struck by a projectile on Monday, according to U.K. Maritime Trade Operations. However, there remains some optimism that diplomatic efforts at the United Nations this week will help end the U.S. conflict with Iran. Brent crude futures are 1.3% higher at $101.64 a barrel, while West Texas Intermediate gains 1.3% to $97.00 a barrel. In London, Shell rises 0.8% while BP gains 0.5%. France's TotalEnergies and Norway's Equinor are around 1% higher, and Italy's Eni is up 0.8%. Spain's Repsol rises 0.6%.(adam.whittaker@wsj.com)

0733 GMT - The key issue for energy markets is whether the current shock remains an inflationary force or starts to slow down activity, says Claudio Galimberti from Rystad Energy. "The Fed, the ECB and the Bank of Japan are all signaling they will not let energy-driven inflation become embedded in wages and prices," the chief economist says. "But raising rates adds a second restraint on growth through higher borrowing costs, bond yields and eventually weaker corporate earnings and household demand." Now, focus shifts to the Trump-Xi summit on Thursday, which could offer important clues on how quickly the market's supply deficit might widen or ease. Any signal on secondary sanctions against buyers of Iranian oil, or on whether China is prepared to adjust its purchases of Iranian crude, could materially alter the global supply outlook, Galimberti says. (giulia.petroni@wsj.com)

0718 GMT - Shell's outlook is improved by high energy prices and the ARC Resources acquisition, Baader Helvea's Frederic Lorec writes. The British energy major agreed to buy Canadian energy producer ARC for about $13.6 billion in April. Baader increases its 2026 earnings per share forecast to $5.76 from $4.45, and its 2027 estimate to $5.57 from $4.48. The upwards revision is largely driven by higher oil price assumptions and additional barrels from ARC. Shares rise 0.6% to 3,511 pence.(adam.whittaker@wsj.com)

0712 GMT - Eurozone government bond yields open higher, tracking U.S. Treasury yield moves, alongside a rise in oil prices. That said, yields remain below recent multiyear highs amid the prospect of diplomatic progress between the U.S. and Iran after U.S. President Trump signaled readiness to meet his Iranian counterpart Masoud Pezeshkian at the UN meeting. The 10-year German Bund yield rises 3.1 basis points to 3.479%, the 10-year Italian BTP yield is up 4.6 basis points at 4.372%, and the 10-year French OAT yield rises 4.8 basis points to 4.507%, according to Tradeweb. (emese.bartha@wsj.com)

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.