Valor | Energy Connection – Dec. 15, 2025

December 15, 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.

• 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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1. U.S. drillers cut rigs for second time in three weeks
2. 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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1. Crude oil futures slide as IEA forecast weakens demand
2. 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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1. A challenging and volatile year for U.S. shale
2. 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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1. Oil & gas accelerating digital shift with agentic AI
2. 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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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.