June 2, 2025 Edition
At Valor, our goal is to keep you informed of the latest news and updates from the oil and gas industry. We are committed to sharing the insights and knowledge that our team gathers to help you stay ahead in this dynamic sector. From mergers and acquisitions to regulatory changes and technological advancements, we cover all the key developments that impact the industry. Stay tuned for weekly updates to keep you well-informed.
- Oil prices jump despite OPEC+ announcing another sharp production hike
- Summary: OPEC+ announced a 411,000-barrel-per-day production hike for July, its third consecutive increase, aiming to regain market share and pressure U.S. shale drillers, yet WTI crude futures rose 3% due to geopolitical tensions. Analysts noted the hike was already priced in, with focus shifting to risks like Ukraine’s offensive and potential Russian retaliation, while Jeffries cited supply disruptions in Libya and Canada as bullish factors. Despite OPEC+’s phased cuts since 2024 (totaling 2.2M bpd), WTI rose 4.4% in May to $60.79, with Brent up 1.2% to $63.90, though analysts warn of a potential 10% price drop long-term.
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- Natural gas prices tick up despite another triple-digit build
- Summary: Natural gas prices rose slightly to $3.447/Mcf despite a 101 Bcf storage build, exceeding the 99 Bcf forecast and marking the fifth straight triple-digit weekly increase. Total stocks reached 2,476 Bcf, 11.3% below 2024 levels but 3.9% above the 5-year average, as supply rose to 112.5 Bcf/day and demand dipped to 97.3 Bcf/day. Weak power demand (-4.4% YoY) and mild weather capped gains, though LNG exports edged up to 14.4 Bcf/day.
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- Trump officials are visiting Alaska to discuss a gas pipeline and oil drilling
- Summary: Three Trump officials visit Alaska to push Arctic oil drilling and an 810-mile LNG pipeline ($44B estimated cost), despite environmental concerns. The trip follows Trump’s order reversing Biden’s Arctic Refuge lease cancellations and aims to secure Asian investments for the gas project. Alaska leaders seek 90% of federal oil royalties as state revenues suffer from low oil prices, while supporting ConocoPhillips’ Willow oil project.
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- U.S. carbon capture lags as EU surges ahead
- Summary: The EU now leads CCS development with a mandate requiring oil firms to create 50M tonnes/year CO2 storage by 2030, while U.S. momentum stalls due to political uncertainty threatening IRA tax credits ($85/tonne for CCS, $180 for DAC). Europe’s binding rules provide investor certainty, contrasting with $14B in delayed U.S. clean energy projects, including CCS initiatives. This regulatory shift positions Europe as the new CCS hub, leveraging oil companies’ expertise for decarbonization, as the U.S. risks losing its early advantage.
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- Drilling permits drop as prices fall, signaling industry pullback
- Summary: Texas drilling permits fell to 570 in April (lowest since 2021), with Midland Basin permits dropping 56% to 133 as WTI prices fell 17% YTD. While Delaware Basin permits rose 28% to 127, analysts expect sustained lower activity as operators adjust to oversupply concerns and OPEC+ output cuts easing. The permit decline signals a production slowdown likely impacting 2026 output, as public and private companies alike throttle back drilling plans.
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- U.S. supreme court limits regulatory reviews of gas projects
- Summary: The U.S. Supreme Court ruled 8-0 to limit environmental reviews for energy projects, barring agencies from assessing upstream/downstream impacts under NEPA. The decision prevents regulators like FERC from studying indirect effects of pipelines, favoring industry groups who called it a “course correction.” Environmental groups criticized the ruling, warning it would fast-track fossil fuel projects while ignoring climate and community impacts.
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- U.S. rig count slides for fifth straight week in Baker Hughes survey
- Summary: The U.S. rig count fell for the fifth straight week, dropping 3 to 563 (lowest since Nov 2021), with oil rigs down 4 to 461 while gas rigs rose 1 to 99. Permian Basin rigs declined 1 to 278, also a November 2021 low, as the total count fell 37 (6%) year-over-year. August saw a 24-rig monthly decline – the largest drop since August 2023 and third consecutive monthly decrease.
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