The Shipley Energy Commercial Solutions Team is excited to share the November Energy Market Update to inform you of trends, weather, and other factors impacting the energy market.
As we approach the end of the year, several pivotal factors are shaping the global oil supply landscape. Below is an overview of recent developments, with potential impacts on pricing, availability, and market dynamics.
OPEC+ Production Targets for December: OPEC+ is targeting an additional 137,000 barrels per day (bpd) of production growth in December. However, industry consensus suggests they may achieve only approximately half of this target due to capacity constraints among member countries. Saudi Arabia remains the primary swing producer capable of bridging this gap, underscoring its continued influence on global supply balances. We anticipate this could support modest upward pressure on Brent and WTI benchmarks if voluntary cuts persist.
U.S. Sanctions on Russian Entities: The potential escalation of U.S. sanctions targeting major Russian oil producers such as Rosneft and Lukoil warrants close monitoring. These measures could significantly disrupt export flows from Russia, a key global supplier, and have broader ripple effects on refined product availability. Given the scale of these companies’ operations, any intensification would represent a material development for wholesale markets—potentially tightening diesel and jet fuel supplies in the near term.
Venezuelan Political Stability: Recent reports of airstrikes on Venezuelan military installations have heightened speculation regarding regime change. However, following these events, former President Trump publicly stated there will be no such transition, leading to immediate market reactions including sell-offs in related assets. While U.S. policy toward Venezuela remains fluid, sustained instability could exacerbate supply disruptions from the region’s heavy crude exports, influencing refinery margins and import costs.
China’s Strategic Petroleum Reserve (SPR) Purchases: Amid signs of an economic rebound, questions persist about whether China will sustain its aggressive buying of crude oil barrels for SPR replenishment. Continued procurement could bolster demand floors and provide a buffer against volatility, particularly as winter heating needs intensify. We view this as a supportive factor for Asian-Pacific fuel pricing in Q1 2026.
OPEC+ Call to Address Shadow Fleet Concerns: OPEC+ has formally urged international action to tackle the proliferation of the “shadow fleet”—uninsured and often sanctioned vessels used for oil transport. Enhanced scrutiny or regulatory measures could increase shipping costs and compliance burdens, indirectly elevating landed prices for imported crudes and refined products.
The final S&P Global US Manufacturing PMI for October 2025 registered at 52.5, up slightly from September’s 52.0 and confirming continued expansion in the sector for the third consecutive month. The near-term outlook for manufacturing remains cautiously optimistic, with robust domestic new orders and output growth supporting sustained activity into Q1 2026, though subdued business confidence due to tariff risks and export weakness could cap momentum. This expansion bodes well for diesel demand, as heightened industrial production and freight volumes are expected to drive steady consumption, potentially bolstered by lower interest rates and reshoring investments.
Price Technical Update
As discussed in the prior few weeks, prices remain rangebound. Crude $56 downside support and $62 upside resistance, a break of either will bring in fresh selling of support and buying above resistance. The levels in RBOB and HO remain. Near term upside targets for RB have been achieved at 1.9350 with near term support at 1.85. As mentioned below “a break below $1.85-$1.87 bring back the multi-year Covid recovery price area”. Near term upside targets for HO have been achieved at 2.4838 after massive run up from 2.16
We are observing signs of downside exhaustion in the price action of energy futures, aligning with the typical seasonal peak weakness observed from late November through mid-December.
The 50-day moving average for WTI crude currently stands at $62 per barrel, serving as a key pivot point. A decisive break above this level could attract fresh buying interest and encourage increased long positions across the energy complex, including RBOB (RB), heating oil (HO), and crude oil (CL) futures contracts.
Indications of rotational flows into the Oil Services ETF (OIH) suggest emerging investor appetite for under-invested energy sector exposure as a broader proxy for sector investment as equities could sustain a broad selloff or correction.
Heating oil (HO) futures continue to demonstrate seasonal strength, outperforming crude oil and widening the “heat crack” refining margins. Gasoline has caught a bid along with heat due to numerous refinery outages and pipeline issues.
These dynamics highlight ongoing geopolitical risks and supply-side uncertainties that may influence your hedging and procurement strategies. Our team is available to discuss tailored forward curves, risk mitigation options, or customized supply solutions. Please reach out to the Shipley Energy team for more details.
After beginning the month with temperatures in the mid to low 80s, October ushered in cooler autumn temperatures with average highs and lows in Cleveland and Cincinnati around 65.2°/45.8° and 68.6°/48.9° respectively. The first freeze of the season occurred in the final week of October, marking the onset of the transition from the low energy usage shoulder months into the season of peak energy usage.
The 12-month electricity prices in Ohio reflected this trend, growing 6.69% from $48.56/MWH to $51.81/MWH. The 36-month prices grew at a marginally greater rate of 7.34% from $49.35/MWH to $52.97/MWH. Pennsylvania faced significantly larger growth in prices, with a change of 12.37% from $52.94/MWH to $56.49/MWH in its 12-month prices, and 7.43% from $54.09/MWH to $58.11/MWH in its 36-month prices.
We continue to see market fundamentals that are potentially worrisome for energy buyers:
Natural Gas storage injection levels are now 171 Bcf above the 5-year average and 29 Bcf above last year.
Despite the higher NG storage levels, electricity prices continue to climb.
The next capacity auction will take place in December. Given the short period between auctions, it’s likely that capacity rates for 6/1/2027 – 5/31/2028 will also hit the FERC price cap.
The wholesale energy markets watch these factors, and changes can push prices up or down on a daily basis. Based on where we stand now, we recommend evaluating these strategies:
We recommend locking in your energy price for the next 24 months as soon as practical. With the forward energy curve flattening, longer terms are becoming more attractive. While there’s always the potential for prices to move down, given the long-term issues PJM faces, we believe the upside price risk is higher.
Consider a capacity and or transmission passthrough structure. While we now have a capacity cap for unknown periods through 5/31/2028, different suppliers may use different estimates, making these offers more difficult to compare than a passthrough structure.
Invest in a plan to reduce your peak demand and overall energy consumption, if you haven’t already. With the rise in capacity prices seemingly here to stay, lowering your associated PLC and or NSPL tag could have substantial price benefits for the following year.
Your to-do list heading into winter:
As you budget for 2026 and beyond, keep in mind it is unlikely for prices to materially decrease in the next few years.
Monitor the broader economic conditions as these can influence energy prices.
Want to help your business navigate the current market? Get started with your Shipley Energy Advisor today!
Natural gas storage has been producing bullish numbers the last few weeks, however, the week ending October 24th showed us a 74 Bcf increase. The market could view this number as bearish. This puts us at a level of over 3.8 Tcf of natural gas in storage. We are on pace to achieve a healthy level of storage by the winter.
Cheniere’s expansion of the Corpus Christi facility is now anticipated to go live by year end – a month early. This adds to winter demand and is bullish
December 2025 weather forecasts are anticipating a cold shot to the Northeast.
Natural gas prices surged to a 7-month high on November 3rd, driven by forecasts of colder weather in the near term. After a brief dip early in the session, prices rallied steadily, with the December 2025 contract rising $0.14 or 3.4% to $4.27/MMBtu. This marked the third consecutive gain, totaling an 11.8% increase, and the highest settlement since March 11.
The United States supplied 72% of Brazil’s natural gas imports in the year 2024. However, over the last 5 years, 2020 – 2025, Brazil has been expanding their LNG facilities more than doubling the import capacity in a plan to diversify the country’s energy supply and ensure energy security. In 2024, Brazil added 3 new terminals that added an estimated capacity of 1.74 Bcf/day (New Fortress Energy’s Barcarena, Terminal Gas Sul FSRU, and Compass Gas & Energia’s Cosan)
Factors impacting the natural gas markets currently:
We are shifting to withdrawal season and may see our first withdrawal in the near future, with biggest drivers being weather and production
A storm in the gulf could prohibit LNG exports which would result in a bearish event.
Recent volatility has been attributed to weather forecasts which impact demand, and storage injections.
Action Advice
We recommend checking in frequently with your account manager.
Other rate options include Basis Only or NYMEX Lock deals to separate the two elements of your natural gas supply price to look for potential value vs standard Fixed pricing. For those who want to float their NYMEX, consider a cap and floor structure to economically manage your risk. Ask your Account Manager for details.
November 2025 Natural Gas NYMEX Settlement Price: $3.376/MMBtu Last month: October 2025 Natural Gas NYMEX Settlement Price: $2.835/MMBtu Last year: November 2024 Natural Gas NYMEX Settlement Price: $2.346/MMBtu
Disclaimer: The market update is intended solely for informational purposes only. Shipley Energy Company does not warrant or attest to its accuracy. All actions and judgments taken in response to this report are the recipient’s sole responsibility. Shipley Energy Company shall not be liable for any direct, indirect, incidental, consequential, special, or exemplary damages or lost profit resulting from these market updates.
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