Domestic Oil and Gas News: Week of October 13th, 2025

Written By Ryan Haggerty

Upstream / Production & Activity

  • U.S. drillers cut the active oil & gas rig count for the first time in six weeks, down by 2 rigs to 547 total (oil rigs fell by 4 to 418; gas rigs rose by 2 to 120). Reuters

    • Notably, the Permian Basin rig count dipped to 250, its lowest since September 2021. Reuters

    • Texas’s total rig count fell by six to 238. Reuters

  • Despite weaker rig activity, the EIA’s revised outlook maintains U.S. crude production at 13.5 million barrels per day for both 2025 and 2026 (up modestly from previous forecasts). Midland Reporter-Telegram+2Advisor Perspectives+2

    • This stability reflects the continued efficiency gains (longer laterals, better completions) and ongoing investment discipline across operators. Advisor Perspectives+2Axios+2

  • Interestingly, emissions from upstream operations in the Permian Basin have fallen ~20% between 2022 and 2024 despite rising production — a sign that methane mitigation and operational controls are having measurable impact. Midland Reporter-Telegram

Infrastructure & Midstream

  • A major infrastructure move: ARM Energy, in partnership with PIMCO, announced a $2.3B pipeline project dubbed Mustang Express in Southeast Texas.

    • The 236-mile system will connect Tres Palacios Storage (Bay City) to Port Arthur via the Katy Hub. Chron

    • It’s designed to transport up to 2.5 Bcf/day of natural gas, with partial capacity dedicated to supporting Sempra’s Phase 2 expansion of Port Arthur LNG. Chron

    • Completion is targeted for early 2029, with open bidding on capacity expected this month. Chron

  • In California, legal challenges are mounting around pipeline / restart efforts for offshore oil projects:

    • A judge issued a tentative ruling in favor of the California Coastal Commission, blocking efforts by Sable Offshore to restart oil transport via the Las Flores onshore pipeline. Reuters

    • The dispute centers on unauthorized repairs and whether state oversight authority is being circumvented by switching to tanker transport. Reuters+1

Inventories, Pricing & Market Outlook

  • According to the EIA’s Weekly Petroleum Status Report, a re-benchmarking adjustment bumped domestic estimated output by ~120,000 barrels/day (≈0.88% upward). U.S. Energy Information Administration

  • On the inventory side, U.S. commercial crude stocks (excluding the SPR) saw a 3.7 million barrel increase in the week ending Oct. 3, reaching 420.3 million barrels. The Wall Street Journal+2Oil & Gas 360+2

    • That level is ~4% below the 5-year average for this time of year. Oil & Gas 360

  • The market reaction has been somewhat mixed:

    • Lower product inventories and weakness in equity markets gave short-term support to crude prices. Rigzone+1

    • But concerns about oversupply—especially from OPEC+ producers increasing output—are tempering upside. Reuters+2Reuters+2

    • Bank of America warned that U.S.–China trade escalations plus rising OPEC+ supply could push Brent below $50/bbl in some scenarios, though they still project a floor near $55 and expect ~$61 for Q4 2025. Reuters

    • The EIA’s updated Outlook trims expected oil prices, reflecting softer demand and rising inventories. Midland Reporter-Telegram

Policy, Regulation & Geopolitics

  • The U.S. Treasury announced new sanctions on 50 entities (individuals, companies, ships) accused of facilitating Iran’s oil & LPG exports via “shadow fleet” shipping strategies. AP News

  • Across the globe, OPEC’s Secretary General emphasized that oil must still play a central role — forecasting ~30% share of the global energy mix by 2050, with increased investment needed in the industry. Reuters

  • On the U.S. domestic front, the legal friction in California underscores the tensions between aggressive fossil fuel development ambitions and state-level regulatory pushback — foreshadowing further litigation and regulatory uncertainty. AP News+1

Themes & What to Watch

  1. Production vs. Rig Count Decoupling
    The weak correlation between falling rig counts and stable or rising production continues to underscore the role of technological efficiencies, better well design, and capital discipline in the U.S. shale sector.

  2. Midstream bottlenecks & solutions
    New infrastructure like Mustang Express illustrates how gas takeaway constraints are being tackled. Watch how this affects regional pricing spreads, especially in north and west Texas.

  3. Price volatility risk from external shocks
    The specter of oversupply (especially from OPEC+), trade frictions, and global demand softness leave prices vulnerable to downside surprises.

  4. Regulatory & legal headwinds
    Projects in sensitive or coastal zones (e.g. California) face increased legal scrutiny. The degree to which federal agencies override or preempt state action will be a key battleground.

  5. Environmental / emission signaling
    The reported reduction in greenhouse gas intensity in the Permian is a signal that industry is taking emissions more seriously — both as compliance risk and investor pressure mounts.

  6. Pipeline / LNG buildout as a lever
    Projects like Mustang Express show how the U.S. is continuing to align upstream growth with export pathways — improving the competitiveness of U.S. gas in global markets.

Ryan Haggerty
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Domestic Oil and Gas News: Week of October 6th, 2025