Market Pulse — Thursday: Production, Hedging, Transaction Data

Welcome to Gold Dragon Daily An AI-powered podcast by Gold Dragon Investments, helping you win the game of passive investing. 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. For more, visit GotTheGold.com. Stay sharp.