On Again Off Again. The Energy Report 09/04/2025

The market also doesn’t seem to be concerned that the low prices are still threatening to reduce U.S. oil production. The latest was a report from the Wall Street Journal that the Houston-based Chevron said it would cut to a quarter of its workforce, or about 3,250 employees. ConocoPhillips has announced it will cut up to 25% of its workforce—about 3,250 jobs—shortly after Chevron revealed a plan to reduce staff by 20%. The axe isn’t just falling on the company’s direct employees; contractors are on the chopping block too, with most of the reductions set to hit this year. Keep in mind, ConocoPhillips has about 13,000 on the payroll worldwide. Meanwhile the Wall Street Journal said the  oil majors are doubling down on offshoring. Chevron and BP are shifting specialized white-collar jobs to India and other cost-saving hubs, slashing thousands back in the States. Chevron’s February cuts were expected to hit up to 8,000 employees as the company overhauls its operations and invests $1 billion in an “engineering and innovation” hub in Bangalore. They’re adding 600 jobs there by year’s end.

But don’t count Chevron out of the Permian yet—they still aim to pump a million barrels a day from their U.S. fields. On the latest earnings call, ConocoPhillips CEO Ryan Lance tried to steady nerves, saying global oil demand would keep climbing in the coming years. The message? Drillers aren’t giving up just yet, even with a market that keeps testing their mettle. Stay Tuned .

Good action for crude oil looks very weak so crack spreads still look solid. From the big picture, we still believe that $60.00 a barrel is going to be a major floor but short term the noise can push us back and forth. Perfect time to be selling the pops and buying the drops.

The  demand side is coming into question because of the report from the Challenger jobs survey that showed that US job cuts came in at 85,979 in August which was the highest month since 2020 while this news is disturbing and also probably suggests that the Federal Reserve is behind the curve on rate cuts. This is only going to increase the odds that the Fed is going to have to act. Not only should they act but there’s going to be rising pressure on the Fed to maybe cut interest rates more than 1/4 which probably won’t happen but based off this data they probably should.

Current indications suggest a potential market bottoming, in natural gas as attention may shift back to Atlantic weather conditions. The Fox Weather Channel has noted that activity in the Gulf could resume as the peak of hurricane season rapidly approaches. The Atlantic hurricane season’s peak is Sept. 10, about when the CPC estimates tropical activity could pick up. While the Gulf of America has been relatively quiet so far this hurricane season, forecasts show that may be changing as the peak of the season approaches. NOAA’s Climate Prediction Center (CPC) estimates the tropics are likely to shift closer to home in the Gulf during the next few weeks. The latest long-range tropical outlook from the CPC, parts of the Gulf and the northern Caribbean Sea are highlighted for potential tropical development into mid-September. The FOX Forecast Center said ocean temperatures in the Gulf are above average in the mid- to upper-80s, which is highly supportive of tropical development.

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