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This is Market Pulse — Tuesday's Numbers

Oil
• WTI: $58.60, down 0.42%
• Brent: $63.12, down 0.39%
• WTI-Brent spread: $4.52
• Oil prices experienced slight decrease Tuesday as concerns about potential oversupply in 2026 outweighed worries regarding restricted Russian shipments
• Brent crude futures decreased by $0.30 to $63.07 per barrel
• WTI crude futures fell by $0.48 to $58.56 per barrel
• Despite the dip, both benchmarks had risen 1.3% on previous day due to doubts surrounding Russia-Ukraine peace deal, which limited expectations for unrestricted Russian crude and fuel supplies under Western sanctions
• Dominant concern in market is potential for oversupply in 2026
• Deutsche Bank forecasts crude oil surplus of at least 2 million barrels per day in 2026, with no clear path back to deficits even by 2027
• Priyanka Sachdeva, senior market analyst at Phillip Nova, noted key short-term risk is oversupply, making current price levels vulnerable
• Michael Hsueh stated path forward into 2026 remains bearish one
• Expectations that U.S. Federal Reserve might cut interest rates at December 9-10 meeting are providing some support to oil markets
• New sanctions on Russian oil majors Rosneft and Lukoil, along with restrictions on selling refined Russian products to Europe, have led some Indian refiners, including Reliance, to reduce Russian oil purchases
• Russia seeking to expand exports to China, with discussions underway between Moscow and Beijing to increase Russian crude shipments

Gas
• Henry Hub: $4.53, down 3.01% from previous day
• Over past month, natural gas prices have increased 13.38%, up 30.71% compared to same time last year
• Near-record production levels and strong storage levels have kept market well-supplied
• Output in Lower 48 states has averaged 109.1 billion cubic feet per day in November, exceeding previous records
• Storage levels about 4% above seasonal norm
• Strong LNG export demand persists, averaging 17.8 billion cubic feet per day in November
• Forecasts for colder weather in late November and early December expected to increase heating demand, driving prices up
• LNG feedgas flows have surged, nearing record highs
• Production in Lower 48 states reached record 112.2 billion cubic feet per day
• EIA projects Henry Hub spot price to average $3.90 per million British thermal units during winter season, with peak in January at $4.25
• EIA estimates Henry Hub spot price will average $3.47 overall in 2025 and $4.02 overall in 2026

Real Estate
• Global real estate markets have shown resilience through third quarter of 2025
• Investor sentiment improving, leading to more competitive market for transactions
• Major markets expected to see continued economic expansion in 2025, with more positive outlook for 2026 due to lower average interest rates and more predictable global trading environment
• Federal Reserve began cutting interest rates, bringing federal funds rate to 4.00% to 4.25%
• Further rate cuts anticipated through end of year and into 2026
• Pent-up industrial demand building, with increased activity in several markets
• Occupier activity has remained resilient despite supply chain uncertainties
• Average asking rents for industrial properties rose 9% year-over-year, with most markets settling into historical growth norms of 2% to 7%
• Following construction boom and brief increase in vacancies, developers scaled back on new construction
• Vacancy rates stabilizing and rents climbing
• Cap rates have declined slightly, and yields appear to be at or beyond their cyclical peak
• Increased portfolio rebalancing towards industrial assets tightening competition in top markets
• This drives up asset prices and lowers cap rates in areas like Southern California, Dallas-Fort Worth, and Atlanta

Credit
• SOFR: 3.93% on November 21st, up from 3.91% previous market day, down from 4.57% year ago
• SOFR is broad measure of cost of borrowing cash overnight collateralized by Treasury securities
• New York Fed publishes SOFR each business day at approximately 8:00 AM Eastern Time
• Federal Reserve began cutting interest rates in September 2025, with further cuts anticipated through end of year and into 2026
• Markets pricing in potential rate cuts at December 9-10 Fed meeting, which could stimulate economic growth
• Credit spreads in Asia tightened in October 2025, expected to remain supported due to easing trade tensions, lower U.S. rates, reduced default risk, and strong market technicals
• Senior secured loans with SOFR plus 650 basis points and LTV under 65% remain the target

Bottom Line
• Oil: Target sub-$50 breakevens, hedge floors above $75—oversupply concerns for 2026 dominating sentiment, Deutsche Bank forecasts 2 million barrel per day surplus with no clear path back to deficits
• Gas: Selective exposure, winter contracts locked—near-record production and strong storage keeping market well-supplied, but colder weather and LNG demand providing support
• Real Estate: Industrial sub-5.7% caps near logistics hubs—cap rates at or beyond cyclical peak, with rents climbing 9% year-over-year
• Credit: Senior secured, SOFR plus 650, LTV under 65%—Fed rate cuts anticipated at December meeting, stay defensive on lower-quality credit

That's your Market Pulse update.

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