Jefferies lists the 10 most important questions About Investing.com

Investing.com – In their “2025 Energy Outlook” report issued on Thursday, Jefferies analysts highlighted ten key questions shaping the global energy landscape, driven by policy changes, market forces and conditions of the environment.

“2024 was a strong year of energy, with big coverage a defining feature of the group,” analysts led by Lloyd Byrne said in a note. “We believe 2025 will be the same, with deregulation in the US and growth in global demand driving the performance of smaller units.”

1)’Can the “Trump Trade” continue?: ‘ Jefferies notes that investors expect benefits for (natgas) and LNG from “pulling demand” under the new regime. “Drill Baby Drill” may have less impact as shale matures and operators focus on earnings.

The outlook remains positive for natgas infrastructure as improved permitting and development could drive growth.

Analysts noted: “In our view, the deregulation process is right for North American natural gas fundamentals. “Investors continue to ask about top options, systems’ service and best practices they can consider.”

2)’North American Natural Gas – Volatility, LNG & Demand Centers:’ LNG demand is expected to tighten gas reserves in winter 2025-26. Jefferies foresees service disruptions causing price volatility as demand outstrips supply. Appalachia and Haynesville are positioned to benefit as demand for energy and data centers continues to grow.

3)’Oil of the Earth Macro (BCBA:): Non-OPEC Supply, Politics & Iran vs Demand:’ Jefferies projects non-OPEC+ supply growth through 2025 to keep pace with global demand growth.

China and India are predicted to contribute significantly to demand. However, environmental risks around Iran could disrupt markets, with possible US sanctions on Iranian exports affecting supply.

“Any reduction in Iran’s exports is likely to be offset by an increase in OPEC+ supply, which partly reduces the remaining capacity,” the analysts added.

4)’The Future of US Oil: Shale Growth or Growth?:’ Oil outlook is “as bad as ever” based on CFTC stance.
While oversupply remains an issue, Jefferies sees potential stability if Iranian barrels are taken off the market. US manufacturing growth is slowing, and its focus is shifting to shareholder returns.

5)’LNG Perspectives: The Oversupply Thesis Pushed to the Right?:’ According to a Jefferies report, LNG volumes are tightening due to project delays and higher-than-expected demand.

The investment bank highlights the potential for higher prices, driven by gas demand in Europe and Asia. After 2025, increased supply from the US, Qatar and Canada could soften the market.

6)’Global Refining S&D: What Happened to the High Intermediate Cycle?: ‘ Jefferies expects global refining supply and demand (S&D) to tighten slightly in the second half of 2025. Capacity shutdowns across the Asia Pacific will reduce additions, leading to a stable rate of clean products.

7)’Energy M&A: What Inning Are We In?:’ Consolidation within the E&P sector is ongoing, and there is room for further activity. Jefferies sees opportunities in medium and oil services for example, driven by higher capital spending and bus restructuring.

8)’Midstream: Still Lots of Interest – Still a Safe Place?: ‘Midstream remains a defensive play, with strong volume growth from LNG and energy demand. Jefferies highlights infrastructure projects in key basins such as the Permian and Appalachia as drivers of sustained interest in the sector.

“We expect that the central bank will continue to attract investors’ attention as a way to invest in quantitative growth while reducing exposure to next month’s price volatility due to reserves weak in North America as production increases,” Jefferies analysts stressed.

9)’Shipping: Will the US Use Iran Sanctions More?:’ Jefferies marks the US “shadow fleet” sanctions as an important issue. Aggressive action could take tanks off the market, increasing prices and usage.

“If 85 Very Large Crude Carriers (VLCC) can be taken off the market under strict enforcement, we could see tank utilization drop from 85% to 95%, which is resulting in an increase in VLCC and tanker prices in general,” the report states.

10)’International Capex – Will It Meet Expectations?:’ Offshore capex is expected to rise in 2025, albeit at a slower pace. Investors’ concerns continue as growth slows, but Jefferies expects continued growth driven by global energy demand.