Market Insights > First Look

First Look - Oil falls to a two-week low

Oil trades lower and falls to a two-week low
- Yesterday, prices fell despite OPEC delaying the plan to begin ramping up production by three months, in a move broadly anticipated by the market
Chevron slows Permian growth (BBG)
- Chevron plans to slow production growth in the Permian Basin next year and reduce capital expenditures
- The company still plans to increase production out of the Permian, but the rate of growth will slow compared to 2024
- Total US production growth is expected to slow in 2025, with analysts expecting the US to add 251 MBbl/d of oil output

Natural gas continues to hover just over $3.00/MMbtu for the past four days following a mild shift in weather
- The month of December is forecast to end with 814 HDDs, according to the Commodity Weather Group (CWG)
  - This would rank 2024 December between the 30 yr and 10 yr normal
  - Directionally, CWG cites more probability that their estimate will come in warmer with fewer HDDs
Haynes Boone (HB) survey shows more gas price pessimism (NGI)
- Respondents in the recent fall survey expect gas prices to stay between $3.19 to $3.23 through 2033
- Spring survey results were more optimistic, with a range of $3.30 to $3.23
- “Future expectations of commodity prices (the price deck) over the life of the loan are not the sole determiner,” the HB researchers noted. “However, they are a principal variable in a bank’s calculations. Therefore, predictions regarding future borrowing base redeterminations are heavily influenced by future commodity price expectations.” (NGI)
- AEGIS notes that the HB survey of bankers is not the same as an economic, fundamental forecast of future prices