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This is Market Pulse — Thursday's Numbers

Oil
• WTI: $59.86, up 1.03%
• Brent: $63.87, up 0.56%
• WTI-Brent spread: $4.01
• U.S. crude inventories: Fell 3.4 million barrels to 424.2 million (more than expected)
• U.S. production: Dropped 28,000 bpd to 13.83 million bpd
• Geopolitical noise around Ukraine peace talks and Russian sanctions creating volatility
• Trend: Supply tightening domestically while global uncertainty keeps prices range-bound

Gas
• Henry Hub: $4.55, down 0.03%
• Futures climbing: December NYMEX contract hit $4.53, up 30 cents from last week
• Natural gas up 30.94% over past month, 30.64% year-over-year
• Winter demand building
• EIA projects Henry Hub will average $3.90 through winter 2025-2026, $4.00 in 2026
• Gas-weighted producers positioned well heading into heating season

Production
• Permian Basin output projected to hit 6.6 million bpd in 2025, up 430,000 bpd
• Marketed natural gas production in Permian expected to reach 25.8 billion cubic feet per day
• Efficiency gains driving growth despite fewer active rigs
• U.S. crude production averaging 13.4 million bpd in 2025 and 2026
• Breakevens in Permian remain competitive
• Infrastructure expansions supporting higher throughput

Hedging
• E&P companies split:
• Heavy hedgers: Infinity Natural Resources locked in 85% of 2025 production; Crescent Energy and W&T Offshore hedged 60%
• Light hedgers: Antero Resources and Range Resources hedged 25% or less
• Companies with higher leverage prioritizing cash flow stability
• Gas-weighted producers hedging aggressively due to price volatility
• Oil producers locked in higher prices in late 2025 and early 2026 after geopolitical spikes
• Hedging environment reflects caution: protecting downside while maintaining upside exposure

Real Estate
• Industrial cap rates saw slight decline in first half of 2025
• Southeastern markets (Savannah, Charleston, Jacksonville): Trading at 4.5% to 5.5% caps
• Atlanta: Ranges from 4.75% to 6.25% depending on asset type and location
• E-commerce demand driving last-mile distribution and cold storage
• Investors shifting capital into industrial due to consistent occupancy and stable cash flows
• Interest rate cuts compressing cap rates in major logistics hubs
• Fed funds rate targeted at 4.00% to 4.25% with further cuts expected
• Lower borrowing costs supporting transaction activity

Credit
• SOFR spreads remain tight despite rising stress signals
• Credit market activity buoyant in 2025 with spreads narrowing despite high issuance
• SOFR-IORB spread has widened, signaling tighter liquidity and higher borrowing costs for banks
• Leveraged loan weaknesses emerging, volatility increasing
• Central banks easing, supporting fixed income markets
• Investors staying defensive on lower-quality credit
• Senior secured loans with SOFR plus 650 basis points and LTV under 65% remain the target
• High-quality bonds favored
• Emerging markets viewed constructively but caution warranted

Bottom Line
• Oil: Target sub-$50 breakevens, hedge floors above $75
• Gas: Selective exposure, winter contracts locked
• Real Estate: Industrial sub-5.7% caps near logistics hubs
• Credit: Senior secured, SOFR plus 650, LTV under 65%

That's your Market Pulse update.

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