U.S. oil and gas giant, Exxon Mobil (NYSE:XOM), has predicted that we will fall far short of the global energy sector’s net zero goals, thanks to high energy costs and surging coal demand. In its newly published Global Outlook, Exxon has forecast that the planet will only be able to cut emissions by 25% by 2050, nowhere near the two-thirds reduction required to meet IPCC goals. And, predictions about renewable energy replacing fossil fuels over the next couple of decades are proving to be premature. 

Oil production in the United States keeps taking out new highs, defying expectations of a looming decline. According to data from the Energy Information Administration (EIA), U.S. crude oil production hit an all-time high of 13.58 million barrels per day (mb/d) in June 2025, exceeding the previous record set in October 2024 by 50 thousand barrels per day (kb/d), and the pre-COVID November 2019 high by 582kb/d. 

However, clean energy bulls can take some comfort in the fact that the U.S. oil sector is showing a clear trend of slowing growth, with the year-over-year increase clocking in at just 328kb/d in June. Further, production in Texas, the country’s leading oil hub, fell 33 kb/d y/y and is now 109 kb/d lower than its October 2024 peak of 5.832 mb/d. 

Commodity experts at Standard Chartered have predicted that U.S. production will peak at 14.34 mb/d in March 2026, before a decline finally sets in. The latest earnings season revealed that shale producers have adopted various strategic adjustments including operational pullback and increased hedging activity amid low oil prices.  The U.S. oil rig count continues to fall, from the  year-to-date high of 488 in mid-February, to 410 in early August. However, rig count appears to have stabilized over the past four weeks. Meanwhile, productivity per rig for new wells has increased from 800 barrels per day (b/d) through 2022 into early 2023, to over 1,000 b/d in mid-2025, helping to offset rig count declines.

Brent crude has continued to trade in a tight trading range for another week, hitting an intra-day high of $68.73 per barrel (bbl) on 26 August to a low of $66.91/bbl on 27 August. According to StanChart, Brent’s next technical level will be at the 200-day moving average at $70.59/bbl . The impending refinery turnaround season has, however, weighed on WTI prices for the past few weeks, widening the Brent-WTI spread to more than $4.10/bbl, while supporting refined product prices. 

Meanwhile, OPEC+ is scheduled to have a virtual meeting on 7th September. The group’s attention will likely be focussed on the April 2023 voluntary output cuts, which totals 1.66 mb/d. With no pressing requirement to unwind this tranche yet, StanChart has forecast that OPEC+ will only proceed with unwinding if the forward curves appear supportive of adding more barrels to the market. Whereas the market has largely shrugged off the higher-than-

expected barrels added by the group in its previous unwinding schedules, StanChart has warned that any news of further unwinding is likely to trigger an oil price sell off. On a brighter note, StanChart says any unwinding is likely to return significantly less barrels to the markets than any nominal value, thanks to capacity constraints by member states coupled with  over-

production compensation schedules.

Meanwhile, the current year outlook for European gas is healthy. The latest data by Gas Infrastructure Europe (GIE) shows that European storage exceeds 90 billion cubic metres (bcm), approaching the maximum capacity of 100.04 bcm. Given the injection trajectory, StanChart estimates that Europe’s gas stores will hold 99.5 bcm on 2nd November.  

Europe’s longer-term outlook is healthy, too, with global LNG capacity set to increase to 649 bcm in 2026 from 550 billion cubic metres last year, before reaching 890 bcm in 2030. The growth is mainly being driven by the U.S., with gas exports surging 22% Y/Y in the first seven months of 2025 to 83 bcm. In fact, the experts are now predicting that an LNG glut is coming soon. To wit, global LNG supply is set to equal demand in the current year, before the markets flips to a surplus of 50 bcm in 2026 and as much as 200 bcm in 2030.

Europe’s gas prices continue to decline, with Dutch TitleTransfer Facility (TTF) for October delivery falling to €31.6 per MWh mark on Wednesday, close to the 15-month low of €30.3 amid ample supply. Early-season weather forecasts suggest a weak La Niña developing in the Pacific, followed by a weaker polar vortex in early to mid-winter. Current weather models are predicting broad regions will experience normal to colder temperatures over western, northern and central Europe in January.

By Alex Kimani for Oilprice.com 

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