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OPEC Shifts to Surplus; Chevron Plans West Texas Data Center Power Project

Oil slips after three-day rally
- The WTI front-month contract declined $0.87 to $60.17/Bbl early Wednesday (7:45 AM CT)
- The nearest WTI time spread hovered near flat at $0.03, signaling a potential shift to contango for the first time since February, an indicator of oversupply.
- OPEC revised its outlook for global oil markets in 3Q25, moving from a projected deficit to a surplus
  - The group raised its estimate for total US liquids output in 3Q25 to 22.81 MMBbl/d from 22.27 MMBbl/d
- OPEC’s latest Monthly Oil Market Report shows global supply outpaced demand by 500 MBbl/d in 3Q25, compared to last month’s forecast of a 400 MBbl/d shortfall
- Later today, the US Energy Information Administration will release its monthly Short-Term Energy Outlook
IEA projects oil demand could grow through 2050
- The International Energy Agency reinstated its “Current Policies Scenario,” which assumes global oil consumption continues rising into mid-century
  - Under this scenario, demand increases by 13% by 2050, largely due to slower adoption of electric vehicles
- The report also includes a “Stated Policies Scenario,” where oil demand peaks around 2030, without designating either pathway as more probable

Regional Market Insights

Updated regularly with the most important market moves and outlooks.

Natural gas is lower, after rallying 22c to a multi-month high
- Yesterday, the prompt Henry Hub contract gained 22c and settled at the highest level in several months, with prices continuing to trade near $4.50/MMbtu this morning
- Weather-driven gas demand should fade over the next few days but will trend higher again over the next two weeks
- LNG feedgas demand remains near a record high, with inflows to export plants totaling 19.5 Bcf/d this morning
Chevron to build data center power project in West Texas (Bloomberg)
- The project will initially have a capacity of 2.5 GW, before ramping up to as much as 5 GW in the future
- Chevron is still in talks with end-users, and a final investment decision is expected next year
- While the project is planned to enter service in 2027, it will ramp up over the course of a few years