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

1041 GMT - The dollar is unlikely to maintain its recent strong momentum unless Friday's U.S. nonfarm payrolls report is much better than expected, ING's Francesco Pesole says in a note. "While it might be too early for a break lower in oil prices, news of the U.S. and Iran working on a deal regarding the Strait of Hormuz could prevent another jump higher." That could stabilize government bonds and risk sentiment, he says. Moreover, the dollar looks expensive, according to ING's short-term valuation models. The DXY dollar index rises 0.1% to 101.101 but a pullback to 100.50 would be more coherent with fundamentals, he says. ING expects this week's jobs data to leave markets guessing about another U.S. interest-rate increase in October. (renae.dyer@wsj.com)

1028 GMT - A potential U.S. diesel export ban could initially push domestic diesel prices lower, but the longer it lasts, the more likely it is to drive up prices of other refined products, according to Goldman Sachs. The bank estimates U.S. retail diesel prices could fall by around $0.25 a gallon for each week of the ban while storage capacity remains available. However, as diesel inventories approach storage limits, U.S. refiners would likely need to cut output, reducing gasoline production and pushing U.S. gasoline prices higher by around $0.30 a gallon a week. "The longer a diesel export ban lasts, the more disruptive it would likely be," analysts at Goldman say. (giulia.petroni@wsj.com)

1026 GMT - The dollar could remain firm in the near term but the longer-term outlook is becoming less favorable for the currency, Societe Generale's Kit Juckes says in a note. Elevated oil prices, robust U.S. economic data and a more risk-averse global environment support the dollar, he says. Further out, November's midterm elections make it difficult for President Trump to maintain accommodative fiscal policies that have supported the economy and the dollar, he says. "The world's major savings economies are saving less than they once did, while the U.S. is having to pay more to attract the investment it needs." The DXY dollar index rises 0.1% to 101.101. (renae.dyer@wsj.com)

1026 GMT - Oil prices extend gains in afternoon trading as negotiations to end the Middle East war remain stalled after Iran's proposed truce was rejected by President Trump. The front-month Brent crude contract for November, which expires on Tuesday, soars 3.9% to $108.40 a barrel, while the second-month contract trades at $100.71 a barrel. WTI futures rise 3.9% to $96.03 a barrel. "Two developments reported over the weekend carry direct implications for sentiment: media reports indicate the U.S. administration has revived its consideration of a diesel export ban, days after distancing itself from a reported 90-day plan, and that a further round of U.S.-Iran talks is expected this week," analysts at Kpler say. Meanwhile, investors are closely monitoring oil flows through the region. Kpler estimates that Middle East crude exports are currently just under 80% of pre-conflict levels. (giulia.petroni@wsj.com)

1017 GMT - The cost of insuring high-yield euro credit against default rises to its highest in more than five months as market sentiment weakens due to renewed U.S.-Iran tensions. President Trump rejected Iran's plan to reopen the Strait of Hormuz, raising concerns about prolonged oil supply disruptions. Brent crude rises 3.7% to $108.18 a barrel. The iTraxx Europe Crossover index of euro high-yield credit default swaps rises 1 basis point to 298bps, the highest since April 8, S&P Global Market Intelligence data show. (miriam.mukuru@wsj.com)

1005 GMT - Palm oil ended lower in Asia. Malaysia's palm oil exports during the Sept. 1-25 period are estimated to be down 24% on month. Prices were likely weighed by Malaysia's sluggish export data and expectations of higher tropical oil output, Kenanga Futures analysts said in a note. The Bursa Malaysia Derivatives contract for December delivery closed 9 ringgit lower at 4,663 ringgit a ton.(amanda.lee@wsj.com)

0831 GMT - Credit valuations and equity prices could face pressure under an environment of higher interest rates, Tickmill Group's Patrick Munnelly says in a note. Middle East tensions and the accelerating oil prices are causing markets to expect three or more interest-rate increases by each of the major central banks over the coming year, LSEG data show. "If energy prices remain elevated, central banks have less room to ease and more reason to keep inflation risks front and centre." Brent crude climbs 2.7% to $107.14 a barrel. (miriam.mukuru@wsj.com)

0814 GMT - The jump in oil prices is turning into a policy rate problem, Tickmill Group's Patrick Munnelly says in a research note. Higher oil prices, sticky inflation expectations, resilient activity and heavy sovereign financing needs are pushing global discount rates higher, Munnelly says. If energy prices remain elevated, central banks will have less room to ease and more reason to keep inflation risks front and center, he says. The average yield on a global bond gauge has now climbed above 4% for the first time since 2007, underlining the scale of the global rates reset, he notes. "This is no longer just a U.S. story," he writes. (sherry.qin@wsj.com)

0803 GMT - TotalEnergies' new longer-term strategy shows consistency and durability, while also allowing for higher returns in the short term, analysts at Jefferies say in a note. The French energy company's updated outlook was an overall positive, with maintained energy growth until 2030 and an increasing portion of energy mix being electricity in the future, the analysts say. At the same time, there was an increase in shareholder distribution, they add. Shares are up 0.78% at 80.6 euros. (aimee.look@wsj.com)

0748 GMT - European gas prices rise more than 2% after President Trump rejected Iran's truce proposal, fueling concerns over prolonged disruptions to LNG flows ahead of winter. In early trading, the benchmark Dutch TTF contract is up 2.4% to 73.63 euros a megawatt-hour. "Lower Norwegian pipeline flows due to maintenance and subdued LNG traffic through Hormuz continue to tighten the market," analysts at ANZ say. "Meanwhile, a rebound in Chinese LNG imports highlights the risk of stronger Asian competition for cargo, leaving European gas prices vulnerable to winter demand and further supply shocks." EU storage levels are currently 70% full. (giulia.petroni@wsj.com)

0732 GMT - Oil prices climb more than 2% after President Trump rejected Iran's truce proposal, keeping the geopolitical risk premium elevated. In early European trading, the front-month Brent crude contract, which expires on Tuesday, is up 2.8% at $107.15 a barrel, while the second-month contract trades at $99.15 a barrel. The U.S. oil gauge WTI rises 2% to $94.21 a barrel. "Rejection of a settlement supports prices because disruption risk remains unresolved, while evidence that significant volumes are still moving prevents the market from pricing a complete supply shutdown," says Naeem Aslam from Zaye Capital Markets. The diplomatic path toward reopening the Strait of Hormuz and resuming discussions over Iran's nuclear program remains highly uncertain. Meanwhile, tightening physical-market conditions are intensifying inflation risks and reviving debate over potential export curbs. (giulia.petroni@wsj.com)

0723 GMT - Yields on U.K. government bonds, or gilts, edge higher and remain at elevated levels after President Trump rejected Iran's ceasefire proposal on Friday, reviving Middle East tensions. The absence of a breakthrough in the U.S.-Iran conflict is driving up oil prices and adding to inflation concerns. Front-month Brent crude rises 2.3% to $106.7 a barrel. Ten-year gilt yields rise 0.9 basis points to 5.399%, Tradeweb data show, having climbed to a one-week high of 5.414% on Friday.