Overview

Through Q3 2025, global energy markets navigated a complex mix of geopolitical uncertainty, shifting trade flows, and evolving policy landscapes. Despite these pressures, physical oil and gas supply chains remained resilient, with disruptions largely contained and regional imbalances managed effectively. As a result, commodity prices continued to reflect underlying supply-demand fundamentals more than short-term policy signals.

GLJ maintains its fundamentally grounded outlook, keeping Henry Hub at $4.00 USD/MMBtu while revising its long-term real WTI forecast to $69.00 USD/bbl. GLJ has left our long term Henry Hub price at $4.00/mmbtu, despite the currently lower prices, we see factors such as increasing LNG exports from USA, slowing growth in Marcellus, increasing power demand and, over the long term, regression to mean in winter weather patterns support our current gas long term forecast for Henry Hub. The change in WTI reflects expectations for a more supply-heavy balance, with OPEC+ continuing to restore barrels and U.S. shale productivity sustaining record output levels. Additional non-OPEC supply growth further reinforces this trend. Along with OPEC, Russia, USA and Canada, all which can grow supply, while Guyana is an infrequently mentioned emerging oil powerhouse. On the demand side, efficiency gains and slower consumption growth in key emerging markets point to a more moderate trajectory. Taken together, these dynamics suggest a structurally well-supplied market, anchoring long-term crude prices just below earlier assumptions while still consistent with resilient global balances.

Oil Prices

WTI crude entered Q3 following late-June volatility, when the Israel–Iran conflict briefly pushed prices into the mid-$70s before quickly retreating. Markets steadied in July, with WTI trading mostly in the mid-$60s to low-$70s, and by September prices had narrowed further, holding in the $63–$66/bbl range before ending the quarter at $62.95 on September 30, according to Reuters.

The overall Q3 trend pointed toward surplus conditions. OPEC+ completed the unwinding of 2.2 million bpd in voluntary cuts by September and began rolling back another 1.65 million bpd in October, with further hikes under discussion for November. Meanwhile, U.S. production held near record highs of 13.3–13.5 million bpd, underscoring efficiency gains even amid a lower rig count. Wells in the Permian Basin are also becoming progressively “gassier,” with gas-to-oil ratios (GORs) rising by onstream year. This means incremental crude growth is increasingly paired with higher associated gas output, adding pressure to U.S. natural gas balances.

Chart: U.S. Crude Oil Rig Counts – Source: Baker Hughes

The resumption of Iraqi exports via the Kirkuk–Ceyhan pipeline further expanded supply, reinforcing bearish sentiment. Short-lived rallies have not offset these dynamics, as ample inventories, spare capacity, and diversified trade flows continue to buffer the market.

Against this backdrop, GLJ has revised its long-term WTI forecast from $72 USD to $69 USD, reflecting the combined weight of sustained U.S. shale output, additional OPEC+ supply, and slower demand growth in key non-OECD economies, where China’s consumption is flattening and India’s trajectory is moderating compared with prior decades.

Natural Gas

The U.S. Energy Information Administration (EIA) reported that Henry Hub spot prices averaged around $3.00 USD/MMBtu in Q3 2025, with August settling at $2.91/MMBtu. Prices softened through the quarter as higher-than-average storage inventories and steady production outweighed strong summer demand. While U.S. output was near record highs earlier in the year, production slipped modestly in Q3, averaging ~106.1 Bcf/d. Although daily volumes briefly touched 107.9 Bcf/d, balances remained loose overall, keeping downward pressure on prices. GLJ forecasts Henry Hub to average $3.35 USD/MMBtu for the remainder of the year, reflecting firm demand and manageable supply expansion.

AECO prices remained under heavy pressure in Q3 2025, briefly turning negative in late September as oversupply, pipeline congestion, and record-high storage left producers with limited outlets. LNG Canada’s ramp-up has been slower than expected, failing to absorb the additional supply producers brought online ahead of first exports, while U.S. LNG growth continues to capture global market share. These factors widened AECO’s discount to Henry Hub, keeping near-term pricing weak. Over the longer term, relief is expected as LNG Canada reaches full capacity and additional West Coast LNG projects come online.

Global LNG

Global LNG benchmarks stabilized at lower levels in late Q3 2025 as supply availability improved and regional demand softened. In Europe, Dutch TTF traded around €31–€33/MWh ($9.50–$10/MMBtu), supported by robust injections that lifted EU storage to 83% by late September, with France and Italy above 90% and Germany at 76.6%. These higher inventories significantly eased winter concerns, helping push volatility back to pre-2022 levels.

In Asia, spot LNG (JKM) averaged $11–12/MMBtu, buoyed by seasonal restocking but capped by milder cooling needs that reduced overall import demand. Softer Asian consumption freed up cargoes for Europe, reinforcing the balance in both basins and limiting upside pressure on prices.

Despite this stabilization, risks remain. NATO-Russia tensions and potential sanctions on Russian energy flows could quickly shift sentiment, while Europe’s planned 2027 ban on Russian seaborne imports underscores ongoing uncertainty.

Looking further ahead, global liquefaction capacity is forecast to expand by 60% by 2030, with half of the additions coming from the U.S. This wave of supply, if not matched by demand growth, could create sustained oversupply and place downward pressure on both European and Asian benchmarks.

While LNG Canada’s initial exports have yet to influence global pricing, its ramp-up represents a structural turning point—absorbing Western Canadian supply and gradually integrating Canada into the Pacific Basin LNG trade.

GLJ’s forecast values for key benchmarks are as follows: