Important Update: Eye on Energy is Evolving
We have been publishing the weekly Eye on Energy as an extension of the Schachter Energy Report to provide timely and expanded insights on the Energy and World Market. Over time, the volume of information and the effort required to produce this report have grown significantly. As a result, we are transitioning Eye on Energy to a paid subscription model on Substack to ensure its continued quality and sustainability.
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Free access ends on September 10, 2025 — just two weeks from now.
After that date, subscriptions will be available at:
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Special Note for Schachter Energy Report Subscribers:
If you are a current subscriber to the Schachter Energy Report, you will continue to receive Eye on Energy as part of your Black Gold subscription at no additional cost.
Limited-Time Offer:
From now until September 30, we are offering a special promotion for those interested in becoming Black Gold subscribers. New annual subscribers will receive $100 off their first year. To redeem this offer, enter coupon code SER100 at checkout using the link below:
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We sincerely thank all of our readers for your continued interest and support.
Warm regards,
The Schachter Energy Report Team
Global Economic, Political & Military Update
WTI Crude oil prices are steady at US$63.66/b (low today US$62.95/b) compared to US$62.83/b last week at this time. President Trump’s two week window for Russia to agree to peace talks with Ukraine (trilateral talks with the US as mediator) are gyrating energy prices. If Trump uses the stick as many US Senators want, then more direct and indirect sanctions would be applied on Russia when the deadline passes. On the other hand if he prefers the carrot then he could loosen sanctions and not put higher tariffs on countries importing Russian oil. It is President Putin’s move now. Will he join the peace talks?
We expect that WTI will breach US$60/b in the coming weeks and bottom in the US$57- US$59/b area. When this occurs we expect another BUY signal to be triggered and we plan to add additional BUY ideas for SER subscribers. The window for weaker prices is until winter arrives when we expect prices to rise over US$70/b and maybe see days over US$80/b in very cold periods during winter 2025 – 2026. The upcoming low and BUY signal will be the second opportunity to buy energy stocks at great bargain prices. The first 2025 signal occurred in April and was a wonderful period to add to energy positions.
The ongoing US stock market rally (new highs for S&P 500, the NASDAQ and the Dow Jones) has been focused on the AI and tech sectors and is very narrow in leadership. NVIDIA earnings later today are now going to either support this upward move or surprise with some disappointing results that tip the group over. With sluggish economic data especially in the consumer areas, we suspect we could see a 20%+ general stock market correction (led by tech) over the coming months. Investors should have cash reserves and be ready for a material market correction. It could get very nasty in September/October! Caveat Emptor! More on this below.
This week’s ‘Eye On Energy’ Important Details:
Fed Chairman Powell at his last central bank conference in Jackson Hole, Wyoming, gave hints that the focus may move to employment concerns over inflation. If the Fed approves a 25 BP decrease in rates that would go OK for the markets. If he cuts by 50 BP, as some economists are forecasting, then the Fed is worried that recession is around the corner. If the jobs and inflation data out before the Fed meeting are hotter than expected then no change in rates is possible and the market will not like this rate decision.
US consumers are watching their wallets and not going out to restaurants and bars compared to last year. Many are expected to close this fall if household budgets remain tight.
Walmart has warned that tariffs are now hitting more and more goods sold in its stores. Tariffs on goods it imports from the EU are now at 15% and from India 50%.
Today US 50% tariffs took effect on India. Originally it was supposed to be 25% but because India was a big buyer of Russian oil (2 Mb/d) an additional 25% was tacked on. This is also a warning to Russia to get to the table on negotiating an end to the war in Ukraine (the carrot choice). If Russia acquiesces then the incremental 25% would be removed. India needs a deal as the US is its largest export market. In 2024 India exported US$87B to the US. India in the meantime continues to buy cheap Russian crude to keep domestic product prices low.
To get financial support from the US government going forward US companies will be required to give the government equity interests. Intel has given 10% of its equity for the massive support it received. Defense contractors are now in discussion over the same support and equity deal. Potentially a very nice win for US taxpayers.
A shortage of farmworkers is lifting vegetable prices in stores. The ICE crackdown on illegal migrants and raids on farms has driven workers away. An example is that eggplant has risen 50% to US$1.50 from US$1.00 three months ago.
Hungary has threatened Kyiv with electricity cuts after Ukraine attacked the Drushba oil pipeline on Russian territory that stopped oil deliveries to Hungary and Slovakia. Hungary provides 40% of Ukraine’s electricity needs. Ukraine continues to hit Russian oil refineries creating a shortage of gasoline and diesel in some areas of Russia. Some reports say that Ukraine has knocked out 17% of Russia’s oil refining capacity or roughly 1.1 Mb/d. Offsetting this Russia seems to be gaining ground in eastern Ukraine. Its attacking forces were bolstered by North Korean and Cuban troops.
As part of the carrot side for Russia, the US government has permitted Exxon Mobil to have negotiations with Russia’s Rosneft oil company about reentering the Russian oil business if peace is achieved. Exxon had been a 30% partner with Rosneft in the large Sakhaline project in Siberia. A senior Exxon executive met with Rosneft’s CEO Igor Sechin in the Qatari capital Doha to open discussions.
Iran is talking about war with Israel and showed off some new longer range missiles. In the meantime it has provided the Yemini Houhthis with cluster bomb ballistic missiles which the terrorist organization fired at Israel. This was the Houthis’ first use of cluster bombs. Israel retaliated against the Houthis for this escalation.
I remain concerned that other Geopolitical Challenges could take place and be the ‘Black Swan’ to take the general stock markets to our downside targets.
Our expected downside targets are:
Dow Jones Industrials Index 35,000 (now 45,524)
S&P 500 4,800 now (now 6,479)
NASDAQ 15,000 (now 21,582)
S&P/TSX Energy Index 230 (now 278)
WTI US$57-59/b (now US$63.66/b)
We see WTI rising after the current dip and the potential issues that could drive prices quite high in coming years are:
Global growth in late 2025 and from 2026 thereon should exceed global supplies.
Lack of production growth from most of the non-OPEC world.
OPEC production nearing effective capacity versus published potential capacity.
US crude production levels are not growing as they have in the past.
If you want to see our Action Alert BUYS and our ongoing research on 37 companies in the energy sector then please sign up now for access to the Schachter Energy Research reports.
EIA Weekly Oil Data
The EIA data for last week was positive, thus keeping WTI prices steady. Total Stocks fell 3.6 Mb to 1662.9 Mb, Commercial Stocks fell 2.4 Mb to 418.3 Mb while the SPR gained 0.8 Mb to 404.2 Mb. Motor Gasoline Stocks fell 1.2 Mb while Distillate Fuel inventories fell 1.8 Mb. Exports fell 562 Kb/d to 3.81 Mb/d. Refinery Utilization fell 2.0% to 94.6% but is above the level of 93.3% in 2024.
US Production rose 57 Kb/d to 13.44 Mb/d and is now up again from 2024 levels of 13.3 Mb/d, up 139 Kb/d on the week. Overall product demand rose a modest 108 Kb/d to 21.6 Mb/d, as Motor Gasoline demand rose 398 Kb/d to 9.24 Mb/d as the summer holiday season demand remains strong.Other Oils demand fell 541 Kb/d to 5.27 Mb/d. Jet fuel consumption fell 170 Kb/d to 1.73 Mb/d. Cushing Inventories fell 0.9 Mb to 22.6 Mb. This level is below the 2024 level of 27.5 Mb.
Overall 2025 US demand is up 0.9% to 20.30 Mb/d up from last year’s 20.12 Mb/d while Gasoline demand is down for the year by 0.6% to 8.79 Mb/d from last year’s 8.85 Mb/d.
In the coming weeks crude prices should decline towards US$60/b as the summer driving season ends. Prices this fall could see a decline below US$60/b towards the US$57 – US$59/b area. We expect to get our next BUY signal at that time. In Q4/25 crude prices should lift to the US$72 – US$76/b level. Energy related stocks should be great performers as global demand picks up when winter starts.
EIA Weekly Natural Gas Data
Last week there was an injection of 13 Bcf (data August 15th). This raised storage to 3.20 Tcf with the biggest increase coming in the Midwest with injection of 16 Bcf. There was a draw from South Central of 13 Bcf. NYMEX is now at US$2.80/mcf. In 2024 there was a 35 Bcf injection and for the five-year average, injection was 34 Bcf. US Storage is now 2.9% below last year’s level of 3.29 Tcf and 5.8% above the five year average of 3.03 Tcf. US power usage is at a record high this year according to the EIA. Demand is forecast to grow materially as data centre demand and home and businesses use more natural gas in the coming years.
We recommend buying the very depressed natural gas stocks during periods of market weakness. Many natural gas stocks are very cheap now. We see much, much higher gas prices in Q4/25 as quite a number of new LNG plants come onstream over the next 12 months.
Demand for natural gas for data centres is rising quickly as more facilities come on stream and local utilities are providing the power via solar or gas fired facilities. The spending by Big Tech is higher now for data centers versus for Telecom in the late 90’s.
AECO is trading around C$0.75/mcf, due to a wet summer in western Canada, particularly Alberta, the slower than expected ramp up of LNG Canada Train 1 facilities, pipeline and facility maintenance holding back 1 Bcf/d of exports and full Canadian storage levels. In September the maintenance issues will be completed and full volumes will be able to be moved via pipelines. In addition, once regular operations are reached at LNG Canada then one export cargo can be loaded every two days. We look for AECO to rise to over C$3.00/mcf during Q4/25 and over C$3.50/mcf during winter 2025-2026. Operators can hedge all of their 2026 production now at >C$3.00/mcf. Higher prices should come as more LNG plants are planned for the BC coast.
European natural gas prices are around US$15/mcf (versus US$12/mcf in Asia) as storage is depleting quite quickly. European inventories are low for this time of year’s stock rebuild. Rebuilding storage to the required 90% level by November 1st for winter 2025-2026 will be a big challenge across Europe and should keep import prices high.
Catch the Energy Conference
Registration is Open – Join Industry Leaders at the Catch the Energy Conference!
Tickets are now on sale for the public. Become a subscriber and get two free tickets to the conference (tickets to the public are on sale at $119 per ticket each during the early bird window until September 20th (they then move to $179 each). To find out more go to www.catchtheenergyconference.com . We did sell out last year so if you would like to attend please get your tickets as soon as possible.
As usual SER subscribers will receive two complimentary tickets to the event. We look forward to seeing you there!
We are working away on getting our Presenters for this year’s conference. Below are those already signed up with confirmation forms in. We have met with other companies and will update this list as their confirmations come in. We have room for 45 companies and there are some slots still available. SER subscribers always get two complimentary tickets so please put the event in your calendar for October 18, 2025 if you can come to Calgary.
If you know of any companies with great stories and are public companies then have them reach out to me and we can meet them and see if the company would resonate with our attendees. We expect to have over 800 attendees this year versus just over 700 last year. My contact information is josef@sersinc.ca.
Thank you to our Sponsors, Exhibitors and Presenters. It is going to be a great lineup and largest attendance this year!
Baker Hughes Rig Data
In the data for the week ending August 22nd, the US rig count saw a decline of one rig to 538 rigs working. US Rig activity is now 8.0% below the level of 585 rigs working last year. Of the total US rigs working last week, 411 were drilling for oil and this is 14.9% below last year’s level of 483 rigs working. The natural gas rig count is up 25.8% from last year’s 97 rigs, now at 122 rigs as wells are drilled to meet LNG export requirements and data centre power requirements. Companies remain financially disciplined despite the Trump administration edict to ‘drill baby drill’. WTI will need to exceed US$80/b for some time before drilling activity picks up materially for crude production to reach new all time highs. Natural gas needs to be over US$4.00 for NYMEX to incentivize natural gas drilling activity on a consistent basis. President Trump is in glee over the lower price of crude and lower gasoline prices (one of his election promises) however, productive capacity is shrinking.
In Canada, there was a 3 rig decrease to 180 rigs. This rig activity rate is now down 17.8% compared to last year’s 219 rigs. There were 123 rigs drilling for oil last week down 19.6% from 153 last year. Drilling for natural gas was down 15.2% from 66 rigs to 56 rigs this week due to low and unprofitable natural gas prices.
Energy Stock Market
The S&P/TSX Energy Index today is at 278. I still expect a further 10 -15% correction in the Index.
We like to BUY when stocks are cheap and being ignored. Bargains are clearly being seen now. Late October should provide the next great window to add to favourite positions at prices 10% lower than today. Investors should decide what you want your energy weighting to be for this long energy super cycle. Our BUY List includes ideas from the Pipeline/Infrastructure/Royalty area, Canadian oil and natural gas ideas, energy service ideas and companies working internationally. Our list includes large Conservative ideas and small to large caps in our Growth and Entrepreneurial categories. Add to your current ideas or add new ideas. We expect global demand should exceed supplies at that time. We see WTI prices above US$75/b consistently during 2026.
Our next SER Monthly comes out to paid SER subscribers tomorrow August 28th. It will include the Q2/25 results of 15 companies. We have started working on the next SER which will include coverage of the last 14 companies Q2/25 results. This report will be out to subscribers on September 11th. If you are interested in independent analysis of the energy sector and to see our Balance of Evidence sections on the individual companies then become a subscriber. https://schachterenergyreport.ca/subscriptions/
We are holding our Q3/25 quarterly webinar on Thursday August 28th. It will start at 7PM MT and last 90 minutes. We plan on highlighting the best ideas we see from our coverage universe so subscribers can focus on names that fit their portfolio needs when we get our next BUY signal. Another reason to become a subscriber.
I will be on with Michael Campbell and his MoneyTalks webcast on Saturday September 27th. With all of the movements in energy prices and the geopolitical issues impacting prices it should be a memorable discussion with Mike.
