Industry Newsletter Archives

Valor | Energy Connection – Feb. 2, 2026

Posted on February 2, 2026February 2, 2026 by Valor

February 2, 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 freeze disrupts U.S. oil and gas production
Summary: Winter Storm Fern slashed U.S. oil production by up to 2 million bpd (15% of the total) and natural gas output by 11% over the weekend, with the Permian Basin bearing the brunt of the freeze. While Permian oil outages initially hit 1.5 million bpd, production is recovering and expected to be fully restored by month’s end. The supply shock triggered a historic 117% rally in natural gas prices—the strongest since the 1990s—before easing as traders took profits.
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Devon and Coterra merge in $58 billion shale deal
Summary: Devon Energy and Coterra Energy have agreed to a $58 billion all-stock merger, creating a massive U.S. shale operator with production exceeding 1.6 million barrels of oil equivalent per day. The combined company, which will retain the Devon name and be headquartered in Houston, aims to generate $1 billion in annual synergies while consolidating top-tier assets in the Permian, Marcellus, and Anadarko basins. This strategic move responds to lower oil prices by securing the largest inventory of sub-$40 breakeven drilling locations in the Delaware Basin.
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U.S. drillers add 2 rigs as crude output falls
Summary: The U.S. total rig count rose by two to 546 this week, as a gain of three gas rigs (totaling 125) offset a single-rig decline in miscellaneous drilling, while oil rigs remained flat at 411. Despite this slight weekly increase, the total count remains down 36 rigs year-over-year. U.S. crude production fell for another week, dropping 36,000 bpd to 13.696 million bpd—166,000 bpd below the all-time high. Meanwhile, the Permian Basin saw a decline of two rigs, though oil prices trended higher with Brent reaching $70.81.
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Natural Gas surges as freeze offs cut 15 percent of supply
Summary: Natural Gas futures (NG=F) surged over 120% in a week—with the February Henry Hub contract briefly hitting a three-year high of ~$7.43 before settling near $4.42—as Winter Storm Fern drove record demand and froze off nearly 15% of U.S. production. While the storm triggered a massive 242 Bcf storage withdrawal, inventories remain roughly 143 Bcf above the five-year average, providing a buffer that prevented prices from holding the extreme $7+ highs. Technically, the market has shifted to a bullish trend, with support established around $3.82 and immediate upside targets near $4.55–$4.80.
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Oil prices tumble 5% amid signs of U.S.-Iran de-escalation
Summary: Oil prices fell more than 5% on Monday, retreating from five-month highs, after comments signaled potential de-escalation in U.S.–Iran tensions. Brent crude slipped to $65.99 per barrel and WTI to $61.92 as the geopolitical risk premium eased. Analysts noted that broader market weakness and ongoing efforts to limit fuel price volatility could constrain the likelihood of further escalation.
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Eagle Ford on the chopping block as Exxon refocuses drilling strategy
Summary: ExxonMobil’s subsidiary, XTO Energy, is marketing its Eagle Ford shale assets in South Texas for approximately $1 billion as the company doubles down on its highest-return projects. The potential sale includes over 1,000 wells spanning 168,000 net acres, consisting of both operated and non-operated interests. This move aligns with a broader industry trend of shedding non-core assets to counter rising production costs and softening oil prices. Exxon plans to redeploy capital into its “advantaged” assets, specifically its massive Permian Basin holdings—bolstered by the 2024 Pioneer acquisition—and its highly prolific offshore projects in Guyana.
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7.65 GW gas power project permitted in Texas for AI
Summary: Pacifico Energy has received approval for the GW Ranch project in Pecos County, Texas, the largest permitted power project in U.S. history. This 7.65 GW gas-fired campus includes 1.8 GW of battery storage and 750 MW of solar, specifically designed as a private-grid facility to support hyperscale AI data centers. Construction is scheduled to begin in Q1 2026, with initial power delivery by early 2027. By operating off-grid, the project avoids ERCOT interconnection queues and aims to protect local consumers from price hikes, though it has drawn attention for being authorized to release greenhouse gases equivalent to 5% of Canada’s total annual emissions.
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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 – Jan. 26, 2026

Posted on January 26, 2026January 26, 2026 by Valor

January 26, 2026 Edition

Natural-gas prices see ‘historic’ surge as U.S. braces for winter storm
Summary: U.S. energy firms added one rig this week, bringing the total to 544—the first increase in three weeks—as oil rigs rose by one to 411 while gas rigs held steady at 122. Despite this uptick, the total count remains down 32 rigs, or 5.6%, compared to last year. Meanwhile, the EIA projects 2026 crude output will dip slightly to 13.59 million bpd amid falling prices, while natural gas production is forecast to rise to 108.8 bcfd even as Henry Hub prices are expected to ease by 2%.
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Permian wells grow gassier, boosting midstream investment
Summary: Permian Basin operators are encountering rising gas-to-oil ratios (GOR) as they target deeper zones and migrate toward the gassier Delaware Basin, a trend East Daley Analytics calls a frustration for upstream investors but an opportunity for midstream companies. This shift, driven by geological factors and aging wells that release more methane as pressure declines, has spurred new investment in processing plants and pipelines. Consequently, Morningstar DBRS forecasts positive growth for natural gas infrastructure in 2026, contrasting with a more muted outlook for crude oil projects.
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U.S. drillers add rigs for first time in three weeks
Summary: U.S. energy firms added one rig this week, bringing the total to 544—the first increase in three weeks—as oil rigs rose by one to 411 while gas rigs held steady at 122. Despite this uptick, the total count remains down 32 rigs, or 5.6%, compared to last year. Meanwhile, the EIA projects 2026 crude output will dip slightly to 13.59 million bpd amid falling prices, while natural gas production is forecast to rise to 108.8 bcfd even as Henry Hub prices are expected to ease by 2%.
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IEA Raises Forecast of Global Oil Demand Growth in 2026
Summary: The International Energy Agency (IEA) raised its 2026 global oil demand growth forecast by 70,000 bpd to 930,000 bpd, citing lower prices and a recovery in the petrochemical sector following the stabilization of economies after 2025’s tariff disruptions. Despite this uptick, the agency projects global supply will surge by 2.5 million bpd to 108.7 million bpd, resulting in a massive implied surplus of 3.69 million bpd. Consequently, benchmark prices remain roughly $16/bbl lower than a year ago, as bloated global inventories—visible in surging oil on water and Chinese stocks—continue to weigh on the market.
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Oil climbs as weak dollar and risk-on mood counter glut worries
Summary: Oil prices climbed as a weak dollar—down 0.8% this week, the most since June—and a risk-on market mood offset concerns regarding a global supply glut. Brent crude rose 0.9% to $64.65 a barrel while WTI hovered near $60, positioning the benchmarks for a fifth consecutive weekly gain. Despite the rally, fundamentals remain bearish: U.S. crude inventories swelled by 3.6 million barrels to their highest level since November, and the IEA reiterated that supply is expected to significantly outpace demand this year as flows increase from the Mediterranean, Black Sea, and Venezuela.
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Orphaned oil and gas wells in Texas broke a 20-year record in December
Summary: The number of orphaned oil and gas wells in Texas reached a 20-year high of 11,123 by the end of 2025, with roughly 2,000 added in the last year alone due to industry consolidation, rising costs, and a 20% drop in crude prices. These ownerless wells pose significant environmental risks and financial burdens on the state, with standard plugging costs around $30,000—though complex leaks can cost ten times that amount. While legislation passed in May attempts to force active plugging, critics argue the lack of deadlines allows companies to pocket profits and dissolve before addressing the cleanup.
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U.S. crude and gasoline inventories see large gains
Summary: The American Petroleum Institute (API) estimated a 3.04 million barrel build in U.S. crude oil inventories for the week ending January 16, alongside an 800,000-barrel increase in the Strategic Petroleum Reserve to 414.5 million barrels. Gasoline inventories continued to surge, adding 6.2 million barrels to sit 4% above the five-year average, while distillate stocks dipped slightly by 33,000 barrels. Despite the inventory builds and a slight dip in U.S. production to 13.753 million bpd, oil prices trended higher, with WTI trading at $60.63.
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Valor | Energy Connection – Jan. 19, 2026

Posted on January 19, 2026January 30, 2026 by Valor

January 19, 2026 Edition

‘Massive’ untapped oil and gas reserves discovered beneath the Permian
Summary: The U.S. Geological Survey (USGS) has discovered 1.6 billion barrels of oil and 28.3 trillion cubic feet of gas in the Permian Basin’s Woodford and Barnett formations, resources potentially critical as traditional shale reserves decline. While experts describe the potential as “massive,” tapping these deeper, hotter formations presents technical hurdles—such as higher gas content and clay-related drilling hazards—that require favorable oil prices to be economically viable.
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Natural gas demand to keep rising as LNG exports, AI drive growth
Summary: U.S. natural gas demand continues to rise, driven by LNG exports, AI data centers, and manufacturing, having already grown 50% since 2006. It now powers 43% of U.S. electricity and accounted for 37% of total energy consumption in 2024. Producers are responding to this growth with a 23% year-over-year increase in rig counts. Despite the rising demand and exports, the EIA forecasts declining commodity prices in 2026, maintaining affordability.
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Pipeline construction reaches an 18-year high on natural gas demand
Summary: Natural gas pipeline construction is projected to reach an 18-year high in 2026, adding approximately 18 Bcf/d of capacity across Texas, Louisiana, and Oklahoma—a level unmatched since 2008. Driven by LNG exports and data center power needs, 65% of this expansion targets the Permian Basin to accommodate soaring associated gas production. With natural gas now comprising 40% of output in major tight-oil plays, Morningstar DBRS considers the risk of overbuilding low due to the robust long-term demand outlook.
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Mitsubishi buys Aethon Energy assets for $7.5 billion
Summary: Mitsubishi Corporation announced a $7.5 billion deal to acquire all U.S. gas and pipeline assets from Dallas-based Aethon Energy, comprising $5.2 billion in cash and $2.3 billion in assumed debt. The acquisition focuses on the Haynesville Shale in Northeast Texas and Northwest Louisiana, assets producing approximately 15 million tons of LNG equivalent annually. This move integrates with Mitsubishi’s existing North American infrastructure to feed Gulf Coast export terminals, aiming to meet surging global power demand from data centers and technology sectors.
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U.S. oil drillers add 1 rig as total count dips
Summary: The U.S. total rig count fell by one to 543 this week, though oil drillers added a single rig, bringing the oil count to 410. This remains 68 fewer than last year, while gas rigs dropped by two to 122, still up 24 year-over-year. The Permian Basin held steady at 244 rigs, with the only regional gain seen in the Haynesville. Meanwhile, U.S. crude production dipped by 58,000 bpd to 13.753 million bpd, just below all-time highs. Completion crews rose slightly to 156. Oil prices climbed on geopolitical risks, with Brent reaching $64.30 and WTI trading at $59.66 per barrel.
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BP eyes $5bn green energy writedown as it pivots to oil
Summary: BP expects a writedown of up to $5 billion on its “transition businesses”—including gas and low-carbon energy—as it refocuses on fossil fuels under incoming CEO Meg O’Neill. The company reported weaker Q4 oil trading, with Brent prices falling to an average of $63.73 amid a 20% annual slump in 2025. Despite the hit, BP reduced net debt to roughly $22 billion. This comes as Shell and Exxon abandoned their North Sea gas asset sale to Viaro Energy, citing changed commercial conditions.
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Oil to average $55/bbl in 2026 ‘reset,’ says Enverus
Summary: Enverus projects 2026 as a “reset year,” forecasting Brent crude to average roughly $55/bbl with tightening balances expected later in the year due to geopolitical risks involving Venezuela, Iran, and Russia. Conversely, natural gas remains constructive, with Henry Hub averaging $3.80/MMBtu this winter and Permian output rising 1.1 Bcf/d on new takeaway capacity. Power markets face strain from AI-driven demand, prompting data centers to seek behind-the-meter generation and driving sustained M&A in gas-fired assets.
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Valor | Energy Connection – Jan. 12, 2026

Posted on January 12, 2026January 30, 2026 by Valor

January 12, 2026 Edition

Goldman warns oil prices may ease further in 2026 as oversupply deepens
Summary: Goldman Sachs analysts forecast that oil prices will decline in 2026 due to a “continuing supply wave,” with Brent averaging $56 per barrel and WTI $52. A projected surplus of 2.3 million barrels per day—driven by robust output from the U.S., Russia, and Venezuela—is expected to push inventories higher and outweigh geopolitical risks. The bank anticipates prices will bottom in Q4 2026 before a gradual recovery begins in 2027 as the market rebalances.
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Oil market dynamics: factors that will drive prices in 2026
Summary: Crude oil posted its sharpest decline since 2020 in 2025, with Brent dropping 19% to near $60.85 and WTI falling 20% to $57.42 amid persistent oversupply. While the January 2026 capture of Venezuelan President Maduro creates political uncertainty, immediate supply impacts are limited given production is under 1 mb/d. Forecasts for 2026 remain bearish with Brent expected between $54–$62, as a potential 2–4 mb/d surplus outweighs a modest 1.2 mb/d demand growth projection.
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Baker Hughes reports first rig count drop in three weeks
Summary: U.S. energy firms cut the total rig count by two to 544, with oil rigs falling by three to 409 and gas rigs dropping to 124, marking the first decline in three weeks. The Permian Basin count hit its lowest level since August 2021 at 244, contributing to a 7% year-over-year decline in total rigs. Meanwhile, the EIA projects 2026 crude output will dip to 13.5 million bpd amid falling prices, while gas production is forecast to rise to 109.1 bcfd on a 13% price increase.
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Texas oil and gas pours $27 billion into public budgets
Summary: The Texas oil and gas industry paid $27 billion in state and local taxes in 2025, a 1% dip from the prior record, with $2.6 billion going to school districts. Employment rose to 495,500 and average wages hit $133,095, while July crude production set a record of 5.9 million barrels per day despite global oversupply. TXOGA President Todd Staples emphasized the industry is adjusting to market conditions while preparing for rising natural gas demand from AI data centers.
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Venezuela oil sector fragile as companies seek changes
Summary: Oil firms demand reforms before investing in Venezuela, where the interim government agreed to transfer 30-50 million barrels of crude to the US after Maduro’s capture. Production dropped to 1.1 million barrels per day from a 3.5 million peak, prompting the US to supply naphtha diluent while seizing three sanctioned vessels. ExxonMobil CEO Darren Woods called the sector uninvestable without changes, leading President Trump to suggest excluding the company despite its offer to assist.
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In 2025, U.S. natural gas spot prices increased from 2024’s record low
Summary: U.S. natural gas spot prices at Henry Hub averaged $3.52 per MMBtu in 2025, a 56% increase from 2024’s inflation-adjusted record low. While record production and lower power sector demand softened summer prices, winter heating needs and a 3 Bcf/d rise in LNG exports drove the annual average higher. Regionally, Northeast prices surged due to pipeline constraints and cold weather, whereas the Northwest saw declines driven by abundant Canadian supply.
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U.S.A. crude oil stocks drop nearly 4MM barrels WoW
Summary: U.S. commercial crude oil inventories (excluding the SPR) fell by 3.8 million barrels to 419.1 million in the week ending January 2, placing levels about 3% below the five-year average. Conversely, total motor gasoline inventories rose by 7.7 million barrels and distillate stocks increased by 5.6 million barrels. Refinery utilization remained steady at 94.7%, while crude imports jumped by 1.4 million barrels per day.
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Valor | Energy Connection – Jan. 5, 2026

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

January 5, 2026 Edition

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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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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