Industry Newsletter Archives

Valor | Energy Connection – Jan. 5, 2026

Posted on January 5, 2026January 5, 2026 by Valor

January 5, 2026 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.

Big oil prepares for leaner prices and harder choices in 2026
Summary: The IEA forecasts a 3.84 million bpd supply surplus in 2026, while Goldman Sachs predicts LNG exports will surge over 50% through 2030. Wood Mackenzie projects the Permian Basin will account for more than 50% of U.S. onshore production, even as broader Lower 48 output stalls and companies defend maintenance levels at roughly $60 WTI. Facing this glut, firms may trim buybacks and shift M&A focus toward gas assets to meet rising AI and export demand.
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U.S. oil drilling activity ends down for 2025, but production still near highs
Summary: The total U.S. rig count rose by one to 546, as oil rigs increased by three to 412 while gas rigs fell by two to 125, leaving the total down 43 from last year. Weekly crude production increased slightly to 13.827 million bpd, remaining just 26,000 bpd shy of the all-time high reached three weeks prior. Permian Basin activity held steady at 247 rigs, down 57 year-over-year, while the Eagle Ford slipped by one to 40, indicating that output remains robust despite reduced drilling activity.
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OPEC+ reaffirms output pause as eight producers cite market stability
Summary: Eight OPEC+ producers confirmed a production pause through Q1 2026, citing healthy fundamentals despite an 18% price drop in 2025, the steepest annual decline since the pandemic. The group emphasized flexibility regarding the return of 1.65 million bpd in voluntary cuts, pledging to fully compensate for overproduction recorded since January 2024. Saudi Arabia, Russia, and others will continue monthly reviews to monitor market stability, with the next virtual meeting scheduled for February 1, 2026.
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Venezuela’s political climate to drive oil markets after Maduro capture
Summary: Oil futures fluctuated as experts forecast a potential short-term price increase of $2-$3 per barrel, contingent on how Venezuela’s political and economic conditions evolve. Despite holding massive reserves, the country currently produces less than 1 million barrels per day, or under 1% of global supply, with 80% of exports previously flowing to China. Analysts warn that due to chronic underinvestment, it will take three to five years to recover to 2 million barrels daily.
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Venezuelan oil policy shakes energy markets
Summary: The U.S. administration revoked Chevron’s license, impacting 240,000 bpd of Venezuelan crude exports, though unexpected U.S. inventory builds suggest weakening demand. Natural Gas trades at $3.94 with immediate support at $3.75, while WTI sits at $68.75, remaining bearish below its $69.25 pivot. Brent holds at $72.26, forming a Triple Bottom pattern that could target resistance at $73.
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U.S. natural gas futures fall ahead of warmer weather, slow demand
Summary: U.S. natural gas futures for February delivery fell 9.6 cents, or 2.6%, to $3.59 per mmBtu as forecasts for warmer weather reduced expected heating demand, with Heating Degree Days dropping from 413 to 369. Production in the lower 48 states reached a record 110 bcfd in December, while LNG export flows also hit a record high of 18.5 bcfd. Meanwhile, storage saw a withdrawal of just 38 bcf for the week ended December 26, missing the 50 bcf analyst forecast.
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U.S. LNG exports break 100 million tons in record 2025
Summary: The U.S. set a global record by exporting 111 million metric tons of LNG in 2025, exceeding 2024 levels by 23 million tons and surpassing Qatar by nearly 20 million. New capacity at Plaquemines LNG added 16.4 million tons, fueling a December record of 11.5 million tons as Europe remained the top destination with 9 million tons imported. Turkey purchased more U.S. LNG in December than all of Asia combined, while 2026 outlooks see further growth as Golden Pass begins production.
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The information provided by Valor in this blog is for general informational purposes only, not to provide specific recommendations or legal or tax-related advice. The blog/website should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.

Valor | Energy Connection – Dec. 29, 2025

Posted on December 29, 2025December 29, 2025 by Valor

December 29, 2025 Edition

U.S. drillers add oil, gas rigs for first time in three weeks, Baker Hughes says
Summary: U.S. energy firms added rigs for the first time in three weeks, raising the total by three to 545 as oil rigs climbed to 409 and gas held at 127. Despite the weekly gain, the count remains down 7.5% or 44 rigs year-over-year, following significant declines in 2023 and 2024. The EIA projects 2025 crude output will rise to 13.6 million bpd and gas output to 107.7 bcfd, spurred by a predicted 63% increase in spot gas prices.
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Nat-gas prices rally on colder U.S. forecasts for early-January
Summary: January Nymex natural gas futures rallied 2.92% to close up +0.124 as forecasts shifted colder for early January across the North and West. Although production remains robust at 113.2 bcf/day, up 7.9% year-over-year, market consensus expects a significant inventory draw of 169 bcf in the upcoming rescheduled EIA report. Meanwhile, European storage sits at just 68% capacity compared to the 78% average, offering support despite U.S. inventories tracking 0.9% above the five-year seasonal norm.
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Oil stuck in tug of war
Summary: Oil prices are stuck in a tug of war, with geopolitics supporting short-term volatility while oversupply and weakening demand cap upside, according to Naeem Aslam of Zaye Capital Markets. BofA Global Research forecasts a global surplus of two million barrels per day in 2026, predicting Brent will average around $60 per barrel next year. However, Enverus Intelligence Research projects Brent averaging $55 in 2026 but turns bullish post-2026, expecting supply shortages due to underinvestment.
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Oil falls 2% on looming supply glut, hopes of Ukraine peace deal
Summary: Oil prices fell more than 2% Friday, with Brent settling at $60.64 and WTI at $56.74, pressured by expectations of a global supply surplus. Prices are on track for their largest annual decline since 2020, down roughly 20%, as the IEA forecasts supply will exceed demand by 3.84 million barrels per day next year. Markets continue to monitor geopolitical developments, while recent U.S. actions involving Venezuelan oil are expected to have limited impact on overall supply.
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Harbour to acquire LLOG for $3.2B
Summary: Harbour Energy agreed to acquire LLOG Exploration for $3.2 billion, comprising $2.7 billion in cash and $500 million in shares, to enter the deepwater U.S. Gulf of Mexico. The deal adds 34,000 barrels of oil equivalent per day to Harbour’s output and grants LLOG an 11% stake, funded partly by a $1 billion bridge facility and term loan. Expected to close late next quarter, the move diversifies Harbour’s portfolio beyond the UK North Sea amid declining domestic fields and high taxes.
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Permian Basin operators brace for tough 2026, eye 2027 rebound
Summary: With oil prices sinking below $60 per barrel, Permian Basin operators are bracing for a tough 2026 with production expected to remain flat at around 6 million barrels per day. Analysts predict a price rebound in 2027 due to current underinvestment, driving a pivot toward natural gas to meet demand from LNG exports and AI data centers. To support this, midstream companies are expanding pipelines to the Gulf Coast and West while operators explore deeper benches like the Barnett.
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Permian Basin shale gas and tight oil and shale gas from U.S. tight oil plays
Summary: Convolution analysis indicates average Permian tight oil well profiles have declined since 2022 due to pressure depletion, despite increasing lateral lengths. A low-price scenario assuming 108,000 completed wells yields a tight oil Ultimate Recovery of 47 Gb, while current estimates across price cases range from 42 Gb to 62 Gb. With 52,000 economic locations remaining, rising Gas-Oil Ratios are used to project shale gas volumes, though medium-price models may prove optimistic.
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Valor | Energy Connection – Dec. 22, 2025

Posted on December 22, 2025December 29, 2025 by Valor

December 22, 2025 Edition

Dallas Fed survey shows oil and gas activity decline
Summary: Oil and gas sector activity edged lower in Q4 2025, with the business activity index negative at -6.2 and the outlook uncertainty index remaining elevated at 43.4. Oil production improved to -3.4 while gas production rose to 0.0; meanwhile, input costs for oilfield services firms slowed, with the index falling from 34.8 to 24.4. The aggregate employment index declined from -1.5 to -10.8, and employee hours fell to -9.3, though the wages and benefits index remained positive but fell to 6.2.
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North America rig count remains flat
Summary: North America’s rig count remained flat at 740, with the U.S. dropping one rig to 548 while Canada added one to reach 192. The U.S. tally includes 414 oil rigs and 127 gas rigs, showing a weekly decline of two offshore rigs despite a gain of four in the Haynesville basin. Year-over-year data indicates the total North American count is down by 40 rigs, driven by a 41-rig decrease in the U.S. offset slightly by Canada adding one rig, while Texas added two rigs week-on-week in the latest update.
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Oil set to close lower for second straight week
Summary: Oil prices are set for a second weekly decline, with Brent down 2.3% and WTI dropping 2.5%, as Russia-Ukraine peace hopes outweigh concerns over a Venezuelan blockade. Brent fell to $59.73 and WTI to $56.02 as traders balanced the risk to Venezuela’s 1% global supply share against reports that peace talks are progressing. Analysts warn that a break below support at $54.98 could target $50.00, though Bank of America expects reduced supply to eventually stem the price fall.
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Oil prices rise as US ramps up action against Venezuela tankers
Summary: Oil prices rose over 2% Monday after the U.S. intercepted a Venezuelan tanker, sparking supply fears regarding the nation’s 1% share of global crude. Brent futures gained $1.31 to $61.78 per barrel and West Texas Intermediate climbed $1.25 to $57.77, reversing the previous week’s 1% decline. The rebound followed tighter enforcement actions and reports of a Ukrainian drone strike on a Russian vessel, despite lingering oversupply concerns in the market.
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U.S. natural gas futures climb 2% on near-record LNG export flows
Summary: U.S. natural gas futures for January rose 1.9% to settle at $3.984 per mmBtu, driven by near-record LNG export flows averaging 18.5 bcfd this month. Despite record production of 109.6 bcfd and mild weather forecasts reducing demand to 127.5 bcfd, the front-month contract climbed out of oversold territory. Meanwhile, Energy Transfer suspended development of its Lake Charles LNG plant to prioritize pipeline investments, while calendar 2026 futures fell to a 13-month low of $3.73.
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Energy Transfer scraps development of Lake Charles LNG export project
Summary: Energy Transfer suspended its 16.45 mtpa Lake Charles LNG project in Louisiana due to rising costs and oversupply fears, becoming the first to halt operations since January’s expedited permits. The company will instead prioritize the Desert Southwest pipeline expansion, where costs rose to $5.6 billion to increase capacity to 2.3 bcfd by Q4 2029. This shift impacts partners like Chevron, which contracted 3 mtpa, as the firm reallocates capital to assets offering superior risk and return profiles.
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JAPEX secures DJ basin tight oil assets in $1.3 billion Verdad deal
Summary: JAPEX approved the $1.3 billion acquisition of Verdad Resources, securing tight oil assets in the Denver-Julesburg basin that will double its net production and triple proved reserves. The transaction is expected to close in February 2026, with subsidiary Peoria Resources assuming operatorship and employing approximately 50 personnel to manage development through the early 2030s. This move establishes a U.S. operator-led business while supporting potential future LNG and carbon capture collaborations.
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Valor | Energy Connection – Dec. 15, 2025

Posted on December 15, 2025 by Valor

December 15, 2025 Edition

BP, Chevron top U.S. Gulf lease sale
Summary: BP, Chevron, and Murphy Oil led the first Gulf of America lease sale under the One Big Beautiful Act, securing 51, 24, and 14 blocks respectively. The auction generated $300.43 million in winning bids for 181 blocks, with Chevron placing the highest single bid of $18.59 million for a Keathley Canyon block. This sale, mandated by 2025 legislation requiring at least 30 future auctions, utilized a 12.5% royalty rate to encourage investment across the 81.18 million acres offered for development.
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U.S. drillers cut rigs for second time in three weeks
Summary: U.S. energy firms reduced the total rig count by one to 548 this week, as oil rigs rose by one to 414 while gas rigs fell by two to 127, leaving the count down 41 rigs or 6.9% year-over-year. This follows a decline of about 5% in 2024 and 20% in 2023, as companies prioritized shareholder returns over production growth amid lower prices. Conversely, the EIA projects 2025 crude output will rise to 13.6 million bpd and gas production will reach 107.7 billion cubic feet per day.
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Crude oil futures slide as IEA forecast weakens demand
Summary: Crude oil futures closed the week over 4% lower, with WTI settling at $57.44 and Brent at $61.12, driven by International Energy Agency forecasts of a 3.84 million bpd supply surplus next year. Despite the U.S. seizing a sanctioned tanker near Venezuela, the market largely brushed off geopolitical risks to focus on the projected glut, which equals roughly 4% of global consumption. Bearish sentiment persists as WTI tests support at $57.01 while facing resistance at the $58.44 level.
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Natural gas prices driven by weather despite support level
Summary: Henry Hub January 2026 futures fell 2.79% to $4.112, erasing November gains as warm weather forecasts for late December reduced heating demand. U.S. dry gas production rose 7.1% year-over-year to 112.5 bcf/day and the rig count fell by two to 127, keeping inventories 2.8% above seasonal norms despite a 177 bcf draw. With prices near $4.052 support and demand down 3.4%, analysts warn that further declines toward $3.913 are likely unless weather patterns shift colder.
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Oil about to snap higher? Market may be too bearish
Summary: Analysts forecast a significant oil glut through early 2026, with the EIA predicting prices will average below $60 per barrel as inventories accumulate. However, the IEA recently revised its outlook, now expecting demand to hit 113 million bpd by 2050 and acknowledging a need for new investment to prevent a structural deficit after 2027. Experts warn that prolonged prices below $60 could cause U.S. output to flatten, potentially turning the current oversupply into a future supply crunch.
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A challenging and volatile year for U.S. shale
Summary: In 2025, U.S. oil E&Ps faced volatility with the rig count falling from 415 to 386 as WTI stayed below $60, while Henry Hub gas prices surged above $5 per MMBtu driven by LNG and data center demand. Despite this, operators maintained record output, with production unlikely to decline unless oil nears $50 per barrel, though LNG project capex has jumped 20% to $1,200 per ton. Looking ahead to 2026, firms like Continental Resources are expanding internationally as domestic shale inventories mature.
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Oil & gas accelerating digital shift with agentic AI
Summary: Bernstein forecasts oil and gas IT spending will grow 7.4% annually through 2029, with 49% of firms planning to deploy Agentic AI in 2026 versus just 13% currently. Rystad estimates digital initiatives could save the sector over $320 billion from 2026 to 2030 through innovations like SLB’s Tela tool. Additionally, two-thirds of operators have integrated IT and operational stacks, enabling companies like Shell and BP to utilize digital twins and predictive maintenance.
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Valor | Energy Connection – Dec. 8, 2025

Posted on December 8, 2025December 8, 2025 by Valor

December 8, 2025 Edition

Antero to buy HG gas assets for $2.8 billion
Summary: Antero Resources Corp. and its pipeline affiliate agreed to acquire HG Energy II LLC’s assets for a combined $3.9 billion in cash, with Antero Resources paying $2.8 billion for Marcellus shale upstream assets and Antero Midstream paying $1.1 billion for pipeline assets. Concurrently, Antero Resources announced the sale of its Ohio Utica Shale production assets for $800 million. This expansion comes as U.S. natural gas futures recently hit $5 for the first time in nearly three years.
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Targa to acquire Stakeholder Midstream for $1.25 billion
Summary: Targa Resources agreed to buy rival Stakeholder Midstream for $1.25 billion in cash, expanding its Permian Basin capacity with 480 miles of pipelines and 180 million cubic feet per day of processing. The deal, expected to close in Q1 2026, includes carbon capture infrastructure and oil gathering assets backed by long-term contracts across 170,000 acres. Targa plans to fund the acquisition using cash on hand and a $3.5 billion revolving credit facility, with RBC Capital Markets advising.
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U.S. oil rig count rebounds after last week’s losses
Summary: The U.S. total rig count rebounded by five to 549 this week, driven by a six-rig increase in oil rigs to 413, even as gas rigs dipped slightly to 129. U.S. crude production rose to 13.815 million bpd, just 47,000 bpd shy of the record, while the frac spread count was reported at 173. Benchmark oil prices moved higher on the news, with WTI trading up at $60.26 per barrel and Brent crude climbing to $63.92.
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Energy trader BGN plans global gas expansion
Summary: Energy trader BGN plans to expand its fledgling natural gas business into a global portfolio by investing in plants, vessels, and pipelines. This initiative coincides with a forecasted boom in the liquefied natural gas market, supported by ramping exports from the United States and additional output from Qatar. While the surge in global supply is expected to push prices lower, BGN is moving to establish its presence ahead of the new supplies.
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Oil market sets stage for high-stakes December
Summary: Following a stable November with Brent trading between $62.48 and $65.16, analysts lowered 2026 price forecasts to $62 per barrel citing a potential 4.2 million bpd oversupply. OPEC+ maintained Q1 2026 quotas, while U.S. natural gas futures hit a 35-month high of $4.9 per MMBtu on record feedgas demand of 18.2 Bcf/d. Notable developments include Targa’s $1.25 billion purchase of Stakeholder Midstream and court approval for Elliott’s $5.9 billion acquisition of Citgo Petroleum.
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U.S. gas price falls to lowest level since May 2021
Summary: The average U.S. gasoline price fell to $2.95 per gallon over the weekend, its lowest level since May 2021, as nearly every state saw declines ahead of the holidays. GasBuddy attributes the 8.5-cent weekly drop to completed refinery maintenance and rising OPEC output, with Oklahoma stations hitting $1.99 while California averages $4.51. The EIA confirmed the trend with a December 1 price of $2.985 and projects 2026 retail prices will average $2.98 per gallon, down from $3.31 in 2024.
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Oil climbs to 2-week high on Fed rate-cut signals, supply concerns
Summary: Oil prices reached a two-week high on Friday, with Brent crude rising 0.8% to settle at $63.75 per barrel and West Texas Intermediate increasing 0.7% to close at $60.08. This momentum was fueled by an 87% market expectation of a Federal Reserve interest rate cut next week, alongside optimism surrounding U.S.-China trade talks. Geopolitical uncertainties involving potential supply disruptions from Russia and Venezuela supported the second straight weekly gain for both benchmarks.
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Valor | Energy Connection – Dec. 1, 2025

Posted on December 1, 2025 by Valor

December 1, 2025 Edition

U.S. shale starts to crack under $50–$60 oil
Summary: U.S. shale operators face tightening margins with oil holding between $50 and $60 per barrel, as drilling costs climb 5% to 10% and crude prices slide from early-year highs. Despite efficiency gains, oilfield employment has slipped through mid-2025, while DUC inventories in the Bakken and Eagle Ford have fallen 25% to 30%. Kpler warns U.S. output could drop by up to 700,000 barrels per day if prices stay weak, with operators noting softer returns as development shifts beyond core acreage.
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U.S. rig count falls off a cliff in Thanksgiving week
Summary: Baker Hughes reported the total U.S. rig count fell by 10 to 544 this week, driven by a steep 12-rig drop in active oil rigs to 407, while gas rigs increased by three to 130. The total count is now down 38 year-over-year, with the Permian Basin falling three rigs to 251 and the Eagle Ford losing two to 39, marking a 70-rig annual oil decline. While weekly U.S. crude production dipped to 13.814 million bpd, frac crews rose by four to 179 as WTI prices recovered slightly to trade at exactly $58.24.
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Natural gas surges toward $5.00 on cold snap and record exports
Summary: U.S. Natural Gas futures surged 3.13% to $4.850 per MMBtu, driven by early-season cold in the Midwest and East that ignited the strongest pre-winter demand since 2021. The market tightened as the EIA reported a second consecutive storage draw of 11 Bcf, leaving inventories at 3,935 Bcf, which is 160 Bcf above the 5-year average. Structural demand is underpinned by record November LNG shipments of 10.7 million tons, up 40% year-over-year, while domestic production hit a high of 109.3 Bcf/d.
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Oil holds gains, natural gas rockets ahead of OPEC+ meeting
Summary: Brent crude settled near $63 per barrel ahead of the November 30 OPEC+ meeting, where the alliance is expected to maintain current production quotas. U.S. natural gas prices spiked on a new LNG export record, though a rare CME blackout disrupted WTI trading amid low post-Thanksgiving volumes. Elsewhere, Syria plans to double output to 200,000 b/d, a drone strike shut Iraq’s 0.75 Bcf/d gas field, and Canada approved Anglo American’s $20 billion takeover of Teck Resources.
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Will 2026 really mark a slowdown or a shift to disciplined growth?
Summary: Despite slowdown fears, the EIA projects Permian crude output will reach roughly 6.9 million barrels per day by 2026, comprising over half of total U.S. oil production. While rig counts dropped by a third since 2022 and Brent forecasts sit in the mid-$50s, efficiency gains and new lithium extraction projects signal a transition to disciplined growth rather than a bust. Further validating this outlook, the Bahia NGL pipeline is expanding to 1 million bpd with ExxonMobil taking a 40% stake.
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Falling oil prices push gasoline below $3 in half the U.S.
Summary: The average U.S. gasoline price has fallen below $3.055 per gallon as 28 states dropped below the $3 mark ahead of a record 81.8 million Thanksgiving travelers. This decline is driven by a 17% year-to-date drop in oil prices, with WTI futures falling below $60 per barrel, alongside lower seasonal demand. Prices in Oklahoma dipped as low as $1.99 per gallon at some stations, marking the lowest level since 2021, with further decreases expected due to global oversupply.
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Texas power deals top $100 billion as electricity becomes the new oil
Summary: Driven by AI and hyperscale computing, Texas power M&A deals hit $106.5 billion in the first three quarters of 2025, far eclipsing the $3.7 billion total from 2021. Notable activity includes Constellation Energy’s $26.6 billion acquisition of Calpine and Fermi America’s $700 million IPO for a massive 11-gigawatt hybrid campus. Supply chain risks persist as U.S. demand for high-voltage transformers surged 116%, yet imports still make up 80% of the supply, causing lengthy inventory wait times.
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Valor | Energy Connection – Nov. 24, 2025

Posted on November 24, 2025November 24, 2025 by Valor

November 24, 2025 Edition

U.S. drillers pick up the pace
Summary: The total U.S. rig count rose by five to 554 for the week ending November 21, driven by two-rig increases in both oil and gas counts to reach 419 and 127, respectively. While weekly U.S. crude production dipped slightly to 13.834 million bpd, Primary Vision’s frac spread count broke a losing streak by gaining two crews to hit 175. Despite increased drilling activity, oil prices trended downward on Friday, with the WTI benchmark trading at $57.89 and Brent falling to $62.37 per barrel.
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ExxonMobil to acquire 40 percent of Bahia NGL pipeline
Summary: Enterprise Products Partners will sell a 40% stake in its 550-mile Bahia NGL pipeline to ExxonMobil, with the deal expected to close in early 2026 pending regulatory approval. The pipeline will initially transport 600,000 barrels per day (bpd) of natural gas liquids from the Permian Basin to Mont Belvieu. The partners plan to boost capacity to 1 million bpd by Q4 2027 via a 92-mile extension to Exxon’s Cowboy plant, capitalizing on a projected 30% rise in Permian NGL production.
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Natural gas prices surge toward $5.00 on U.S. cold snap and LNG exports
Summary: Natural gas prices stabilized near $4.70/MMBtu, with futures settling at $4.58 after a 50% gain since mid-October, supported by forecasts of sustained cold weather across the U.S. Midwest and Northeast. The bullish sentiment is reinforced by U.S. working gas stocks at 2.44 Tcf (~47 bcf below the five-year average) and rising LNG exports, even as European TTF benchmarks fell to €30.31/MWh on milder weather and reduced geopolitical risk. Technically, a close above $4.81 could push prices toward $5.00, while support holds firm at $4.51–$4.65 amid record production near 104 bcf/d.
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U.S. Gulf output set to rise as Beacon Offshore starts new wells
Summary: Beacon Offshore Energy brought four wells online in the U.S. Gulf averaging 25,000 bpd, using technology to handle 20,000 psi pressure at depths exceeding six miles. This project revives the Shenandoah prospect to counter plateauing shale output, with Beacon planning to add roughly two wells annually to its floating production hub. Wood Mackenzie forecasts U.S. Gulf production will increase by 300,000 barrels per day this year and 250,000 in 2026, signaling a drilling renaissance in the region.
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Refining margins soar as oil product markets tighten
Summary: Refining margins across the U.S., Europe, and Asia hit two-year highs as fuel markets tighten due to refinery closures, maintenance, and attacks on Russian infrastructure. Supply constraints are acute, with U.S. crude throughput falling to 15.6 million bpd from 17.5 million bpd, while global refinery runs dropped 2.9 million bpd in October. Strong diesel demand and depleted stocks are offsetting bearish crude signals, incentivizing refiners to maximize production ahead of impending sanctions.
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Oil prices on edge as peace talks progress
Summary: Oil prices remain under pressure after a ~3% decline last week — with West Texas Intermediate (WTI) trading near $58.05/barrel and Brent Crude around $62.58/barrel. The slide comes as negotiators in Geneva make progress toward a potential peace framework in Eastern Europe, raising the possibility of previously sanctioned Russian crude returning to global markets. At the same time, a stronger U.S. dollar and increasing output from OPEC+ are adding further headwinds for oil prices.
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IEA: Oil demand to keep rising until 2050
Summary: The International Energy Agency (IEA) has reversed its previous prediction of peak oil demand by 2030, now projecting demand could rise to 113 million barrels per day by 2050, a 13% increase from 2024 consumption. This shift stems from using a “current policies scenario” that reflects governments prioritizing energy security over climate goals and rising power needs from tech industries like AI. Consequently, the IEA warns the world will likely fail to meet the Paris Agreement’s 1.5°C target.
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Valor | Energy Connection – Nov. 17, 2025

Posted on November 17, 2025November 17, 2025 by Valor

November 17, 2025 Edition

U.S. oil drilling picks up: Baker Hughes
Summary: The U.S. total rig count rose by one to 549 for the week ending November 14, as oil rigs increased by three to 417 while gas rigs fell by three to 125, according to Baker Hughes data. Meanwhile, U.S. crude oil production for the week ending November 7 set a new record high, rising to 13.862 million bpd from 13.651 million bpd, even as the frac spread count fell by two to 173. Regionally, the Permian Basin rig count rose by two to 253, and oil prices rose, with WTI set to close above $60 a barrel and Brent trading up $1.48 to $64.49.
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Floating oil storage surge puts market balance on edge
Summary: A surge of sanctioned oil from Russia, Iran, and Venezuela is idling in floating storage, threatening market balance. Kpler data shows Iranian floating storage doubled to >36 million barrels since August, while Vortexa calculates 161 million barrels of Iranian crude (storage/transit) are at sea. Oil in Asia floating storage alone jumped by 20 million barrels in just 14 days to 70 million barrels (OilX), with sanctioned oil accounting for 20-40% of the total build since August, a glut which could deepen oversupply.
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Milder forecast and storage build pressure natural gas futures
Summary: U.S. natural gas futures fell 1.72% on Friday to settle at $4.566, retreating as bearish news weighed on the market. The EIA reported an unexpected storage build of +45 Bcf for the week ending November 7, which was significantly higher than the +34 Bcf consensus and the +35 Bcf five-year average. This surprise build pushed total inventories to 4.5% above the five-year average, while high production at 109.9 Bcf/day (+7.1% y/y) and forecasts for mild weather through Nov 28 continue to pressure prices.
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Chevron picks Texas for first AI data center power project
Summary: Chevron selected West Texas for its first natural gas-fired power project to support the AI boom, planning a final investment decision in early 2026 for a 2027 operational start date. The facility is expected to ramp up to 2,500 MW (with 5,000 MW future capacity) and supports a strategy to increase free cash flow 14% annually, reaching $30B by 2030 (at $70/bbl Brent). Chevron also reduced its annual capital budget to $18-$21 billion, raised its annual production growth target to 2-3%, and plans $10-$20 billion in yearly stock buybacks.
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U.S. government puts 80 million acres of Gulf of Mexico up for lease
Summary: The Bureau of Ocean Energy Management (BOEM) announced Monday that leases for nearly 80 million acres of the Gulf of Mexico will soon hit the market. This is the first of 30 planned sales mandated by the “One Big Beautiful Bill Act” and aligns with the “Unleashing American Energy” executive order. The Gulf’s 160 million acres are estimated to hold 29.59 billion barrels of undiscovered oil and almost 55 trillion cubic feet of natural gas, and the royalty rate for the new leases will be 12.5 percent, the minimum allowed by law.
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Goldman revises oil demand forecast after IEA U-Turn
Summary: Goldman Sachs has revised its oil demand forecast higher, following the IEA’s U-turn, and now sees demand expanding to 113 million b/d by 2040 (from 103.5 million b/d in 2024), abandoning its 2034 peak projection. The IEA itself also departed from its <2030 peak forecast, now projecting 113 million b/d by 2050. Both revisions are attributed to slower net-zero policy progress, infrastructure obstacles for renewables, and slower-than-expected EV adoption, signaling a government priority shift to energy security.
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Adnoc buy of Covestro wins conditional EU approval
Summary: TAbu Dhabi National Oil Co. (Adnoc) secured conditional EU approval for its EUR 12 billion ($14 billion) takeover of Covestro AG, a key step in its push to build a global gas and chemicals leader. The approval hinges on 10-year commitments from Adnoc, including maintaining Covestro’s intellectual property in Europe, to allay concerns about state subsidies under new EU foreign subsidy rules. This deal, the largest of its kind, gives Adnoc control of the German supplier and advances its international expansion through its investment unit XRG.
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Valor | Energy Connection – Oct. 27, 2025

Posted on October 27, 2025October 27, 2025 by Valor

October 27, 2025 Edition

Oil and gas industry layoffs accelerate with lower prices
Summary: Oil and gas industry layoffs accelerate due to lower prices and M&A integration, impacting firms like Chevron, Exxon, ConocoPhillips, BP, Halliburton, and SLB. These companies are cutting thousands of roles through reorganization and restructuring to improve efficiency. Chevron plans a 20% workforce reduction by end-2026, ConocoPhillips up to 25%, and BP targets 6,200 office roles by end-2025 after cutting 3,200 contractors and planning another 1,200 contractor cuts this year.
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Oil spikes as U.S. sanctions Russian producers
Summary: New U.S. sanctions froze assets of Russia’s top oil producers, Rosneft and Lukoil, and blocked U.S. entities from dealing with them, causing oil prices to leap over 5%. Intended to pressure Russia over the Ukraine war, the sanctions led major buyers like India (taking 1.6-1.8M bpd) and China (17% of imports) to prepare massive cuts in Russian crude. This disruption pushed Brent crude above $65/barrel, boosting Shell and BP shares by ~3%, while Exxon and Chevron saw smaller gains of 1.1% and 0.6% respectively.
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U.S. rig count rises for second straight week, Baker Hughes says
Summary: For the second straight week, the U.S. oil and gas rig count rose, climbing by two to 550 as of October 24, its highest level since June, though it remains down 6% year-over-year. This increase was driven entirely by oil rigs, which rose by two to a new total of 420, while gas rigs held steady at 121; the Texas rig count fell one to a low of 236. Despite a planned 3% capex cut for 2025, the EIA projects crude output will rise to 13.5 million bpd and a 56% gas price hike will boost gas output to 107.1 bcfd.
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Oil prices head for weekly gain after U.S. sanctions spark rally
Summary: New U.S. sanctions targeting Russia’s Rosneft and Lukoil pushed oil prices higher, putting benchmarks on track for a weekly gain after recent losses, with Brent near $65.63 and WTI near $61.43 after adding ~$4/bbl. The rally was sparked by reports that major buyers China and India are pausing new orders for Russian crude, which totals over 2 million barrels per day (bpd), as they assess sanction risks. Despite the pause, analysts believe the impact may be limited as replacing this volume is challenging, and Russia might circumvent the sanctions.
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LNG buildout needs both Permian and Haynesville gas
Summary: Growth in U.S. LNG exports, set to add 15 Bcf/d of capacity to the current 17.5 Bcf/d, necessitates increased gas supply from both the Permian and Haynesville basins due to Appalachian takeaway limits. The EIA forecasts Permian output reaching 28 Bcf/d and Haynesville 15.6 Bcf/d by 2026, though bottlenecks like the Katy hub (with <3 Bcf/d to Gillis) require more Haynesville output. Pipeline expansions totaling 8 Bcf/d are planned, while higher prices above Haynesville’s ~$3.50/MMBtu breakeven will spur drilling.
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Water shortage threatens Texas refining hub
Summary: Corpus Christi, a major Texas refining hub processing >900,000 bpd, faces its worst water shortage, with storage at ~11.7% capacity, potentially reaching a Level 1 emergency late next year. This threatens the industrial sector, which used >1.1 billion gallons in September (more than residents/businesses), while a $1.2B desalination plant is uncertain. The city’s new plan uses surcharges ($12/1000 gal over 12M gal/month) and potential 5% cuts for industry, as manufacturing water use grew to 23.1B gal/yr by 2023.
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Natural gas holds $3.30 on record LNG exports and rising winter demand
Summary: U.S. natural gas prices settled near $3.30/MMBtu, holding a 10% weekly gain despite a 1.2% daily drop, balancing high storage against rising heating demand and record LNG exports. Storage sits at 3,878 Bcf (~5% above the 5-year average), while LNG export flows surged to an all-time high of 17.29 Bcf/d, exceeding April’s record, and production remains high near 106.7 Bcf/d. Technically, prices hold support above $3.20-$3.27, with a potential technical rally targeting $3.71–$3.80 if bullish momentum sustains.
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Valor | Energy Connection – Oct. 20, 2025

Posted on October 20, 2025 by Valor

October 20, 2025 Edition

U.S. oil growth shifts from Shale to Gulf
Summary: U.S. oil growth is shifting from maturing shale fields to the Gulf of Mexico, where output is projected to rise from 1.8 million barrels per day (bpd) to 2.4 million bpd by 2027. Driven by tech advances and lower breakevens (offshore as low as $20/bbl vs. $48/bbl shale average), deepwater projects like BP’s $5B Tiber-Guadalupe are gaining favor. The EIA forecasts Gulf output reaching 1.96 million bpd in 2026, offsetting slowing onshore growth and highlighting offshore’s rising importance under supportive federal policies.
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Texas’ orphaned well count hits highest level in nearly 20 years
Summary: Texas’ orphaned oil and gas well count reached 10,029, the highest level since August 2006, according to watchdog group Commission Shift and confirmed by the Railroad Commission. Although the agency plugs about 1,300 wells annually, critics argue this pace is insufficient, leaving leaking wells unaddressed while the backlog continues to grow due to market conditions. In response, the legislature passed Senate Bill 1150 to tighten rules for inactive wells, scrutinize transfers, and require compliance plans, though calls for stricter bonding remain.
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Supply and demand fears drag oil prices lower
Summary: Oil prices fell in early Asian trade Monday, with Brent crude down 0.29% to $61.11 and WTI down 0.35% to $57.34, continuing a third consecutive weekly decline of over 2% for both. The drop is driven by supply concerns as OPEC+ unwinds cuts and the IEA forecasts a 2026 surplus, coupled with demand fears stemming from escalating U.S.-China trade tensions. Easing geopolitical risks and record-high U.S. oil production are also adding to the downward pressure on prices, according to analysts.
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Kazakhstan monitors oil after Russian gas plant hit
Summary: Kazakhstan’s energy ministry is monitoring its oil production after Ukrainian drones struck Russia’s Orenburg gas plant, over 1,000 km from the border, causing it to halt gas intake from Kazakhstan’s Karachaganak project. The drone attack, which Ukraine’s General Staff confirmed, may impact Karachaganak’s co-produced oil and gas output, highlighting Ukraine’s expanding long-range strike capabilities. Ukraine also claimed a strike on the 170,000 bpd Novokuibyshevsk refinery, damaging a primary crude processing unit.
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NextDecade greenlights $6.7 billion LNG expansion
Summary: U.S. LNG developer NextDecade announced a positive final investment decision (FID) on Train 5 at its Rio Grande LNG facility, committing $6.7 billion to the expansion project. Train 5 will add approximately 6 million tonnes per annum (MTPA) of capacity, bringing the total under construction to ~30 MTPA, supported by 4.5 MTPA in 20-year sales agreements with JERA, EQT, and ConocoPhillips. This FID follows Train 4’s approval and other U.S. LNG project sanctions this year, with Train 5’s completion and first commercial delivery expected in the first half of 2031.
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LNG boom impacts U.S. consumer prices
Summary: U.S. LNG exports hit record highs, reaching 9.4 million tons in September (up from 9.3 million in August), driven by strong global demand, particularly from Europe. This export boom is contributing to higher U.S. natural gas prices (up ~$1/MMBtu year-over-year), creating tension with the goal of cheap domestic energy. As shale basins mature, executives say prices must hit $5/MMBtu to incentivize drilling in costlier areas, with LNG exports potentially rising from 14 Bcf/d (July) to 27 Bcf/d according to analysts.
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U.S. rig count rebounds, showing industry resilience
Summary: According to Baker Hughes, the U.S. oil and gas rig count saw a minor increase for the week ending October 18, rising slightly to 547, though the total count is still down 37 rigs (6%) year-over-year. Oil rigs held steady at 418, while gas rigs rose by one to 121, their highest count since August; the Texas rig count fell by one to 237, its lowest since September 2021. Despite planned 4% capex cuts, the EIA projects 2025 crude output will rise to 13.5 million bpd and gas output will reach 107.1 bcfd amid a projected 56% gas price increase.
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