NEW YORK, Dec. 28, 2025, 1:23 p.m. ET — Market closed
Energy stocks head into the final trading days of 2025 with a familiar tug-of-war: crude prices are weak and sentiment is cautious, but many large-cap energy companies still offer resilient cash returns—and the next batch of U.S. petroleum inventory data is due as soon as Monday.
The immediate backdrop is Friday’s sharp pullback in oil. Brent crude settled at $60.64 a barrel and U.S. West Texas Intermediate (WTI) at $56.74, both down more than 2% on the day as traders weighed fresh supply-glut concerns alongside shifting geopolitical expectations. [1]
With U.S. equities closed today for the weekend, investors are using the pause to reassess what matters most for energy stocks into Monday: oil’s floor near $60 Brent, natural gas strength, LNG’s longer-term supply risks, and a rare scheduling twist—the U.S. government’s petroleum status data is set for release on Monday instead of the usual Wednesday.
Where energy stocks stand after the last U.S. session
Friday’s post-Christmas U.S. session was marked by thin volume and limited conviction across the broader market, with major indexes finishing close to flat. [2] That low-liquidity setting matters for energy shares because commodity-linked sectors can see outsized moves when a single headline hits an illiquid tape.
Despite oil’s pressure into year-end, the S&P 500 Energy sector has held a modest gain in 2025. As of the Dec. 26 close, S&P Dow Jones Indices data showed the sector up about 3.74% year-to-date, with the index down 0.28% on the day. [3]
For investors tracking the sector via ETFs, Energy Select Sector SPDR (XLE) finished Friday’s session around $44.25 (per historical pricing), underscoring how the group has been more rangebound than the broader market’s rally. [4]
The biggest driver in the last 24–48 hours: “glut” fears return to center stage
Oil didn’t just dip—it did so on a narrative that tends to ripple across the entire energy complex: the market may be heading into 2026 with too much supply. Reuters attributed Friday’s drop to investor focus on a looming global supply glut, with attention also on the possibility that a Russia-Ukraine peace process could eventually change the sanctions picture and alter future supply expectations. [5]
Earlier Friday, crude had been steadier in holiday-thinned trading while markets assessed supply risks tied to Venezuela and security developments abroad—another reminder that geopolitics is still relevant, even if it hasn’t delivered the same sustained price spikes seen in other years. [6]
Outside the U.S., the oil-price drag is showing up in equity performance. Reuters reported that Brent is down about 19% year-to-date, heading toward its worst annual performance since 2020, a dynamic that weighed on Gulf markets over the weekend. [7]
Stock-specific moves: refiners and E&Ps slipped in the holiday tape
In Friday’s quiet U.S. session, some notable energy names still moved enough to give investors a read on positioning:
- Marathon Petroleum (MPC) fell 1.23% to close at $163.69, underperforming large integrated peers in the same session. [8]
- Devon Energy (DVN) dropped 1.46% to $35.67, with peers such as EOG Resources, Occidental, and Diamondback also down modestly. [9]
These kinds of declines can be deceptively informative at year-end: when volumes are light, tax-driven selling, portfolio rebalancing, and risk-reduction can temporarily overwhelm commodity fundamentals—only for the trade to reverse quickly once liquidity normalizes in early January.
Natural gas: a different setup than oil—and it matters for energy leadership
While oil has been grinding lower into year-end, U.S. natural gas has been firmer. MarketWatch pricing for NYMEX natural gas (front month) showed levels around $4.421 per mmbtu on Dec. 26. [10]
That divergence helps explain why “energy stocks” aren’t moving as a single block. In practice, the sector can split into two tapes:
- Oil-levered E&Ps that react quickly to WTI/Brent moves
- Gas-weighted producers and midstream/LNG-linked names that are driven by Henry Hub, LNG feedgas demand, and export expectations
This split is important going into 2026, because an oil surplus narrative can coexist with a tighter regional gas story—especially if winter weather or export flows surprise.
LNG and the energy-transition wildcard: a 2030 risk investors are starting to price now
One of the most consequential energy stories in the last 48 hours wasn’t about WTI at all—it was about LNG.
In a Reuters Breakingviews column published Friday, the argument was blunt: accelerating deployment of solar, wind, and batteries could turn the expected LNG boom into an oversupply problem by the end of the decade, even as major producers plan significant capacity growth. The piece highlighted how rapidly improving renewable economics—and deployment speed—could cap long-term LNG demand growth, particularly in Asia. [11]
That matters for U.S.-listed energy exposure in at least three ways:
- LNG developers and exporters can face higher perceived long-term volume and pricing risk.
- Integrated majors with LNG ambitions may see investors discount growth projects more heavily.
- Utilities and grid-adjacent “energy” plays can benefit if electrification continues to shift the profit pool away from molecules and toward power infrastructure.
A related datapoint on investor appetite: Barron’s noted that two high-profile energy-adjacent IPOs in 2025 struggled badly—an outcome that can influence risk capital for future LNG and power-mega-project financings. [12]
Europe’s supply story: North Sea investment freeze adds another layer
Investors looking beyond U.S. tickers are also seeing a structural headline out of the UK: the Financial Times reported the UK North Sea suffered its worst year since the 1970s, with no exploration wells drilled in 2025 and expectations for another sharp investment decline in 2026, citing policy/tax uncertainty as a major driver. [13]
For global energy-stock investors, this underscores a broader theme: supply can be abundant globally while still becoming more constrained in specific basins due to policy, capital discipline, or declining legacy fields. That tension often shows up as dispersion—winners and losers within the sector rather than a single direction for “energy stocks.”
Forecasts and analyst views: bearish 2026 pricing meets “contrarian” rebound calls
Even with oil under pressure now, the outlook for 2026 is not one-sided—and that uncertainty itself can create volatility in energy equities.
- Goldman Sachs has projected oil prices could decline through 2026 on the view that rising supply keeps the market in a sizable surplus, forecasting Brent averaging $56 and WTI $52 in 2026. [14]
- The International Energy Agency (IEA) has also pointed to a large 2026 surplus, with Reuters reporting the IEA’s estimate of supply exceeding demand by about 3.84 million barrels per day (even after trimming its prior surplus view). [15]
But on the other side of the debate:
- In a Reuters video segment, Rob Sluymer, technical strategist at RBC Wealth Management, framed oil as a potential “contrarian” setup into 2026, arguing prices could be ready to rise. [16]
- Another Reuters segment quoted Homayoun Falakshahi of Kpler saying oil could see more downside “spikes” near term, but that the market’s focus may shift toward future production constraints next year, setting up a potentially more constructive backdrop later. [17]
- In a Reuters analysis from late November, Matthew Sherwood, lead commodities analyst at EIU, suggested geopolitical risks and supply dynamics could help put a floor under prices around $60 a barrel even in a softer 2026 scenario. [18]
For energy stocks, these competing forecasts matter because equities don’t just trade spot oil—they trade the forward curve, capex assumptions, and whether dividends/buybacks look sustainable under lower-for-longer pricing.
What investors should know before the next U.S. session
Because the stock market is closed today, the key question becomes: what could move energy stocks when the next session opens?
1) A major U.S. catalyst lands Monday morning: EIA inventory data (unusual timing)
The U.S. Energy Information Administration says its Weekly Petroleum Status Report is scheduled for Monday, Dec. 29, 2025, with releases at 10:30 a.m. and 1:00 p.m. ET due to a schedule change tied to federal government closure. [19]
Why this matters: energy stocks often react quickly to crude inventory surprises, gasoline/distillate signals, and implied demand trends—especially in a thin year-end tape.
2) Holiday trading calendar: liquidity and gaps can be the story
Markets are in a holiday-adjusted period into New Year’s. Investopedia notes that U.S. stock markets are closed on New Year’s Day (Jan. 1, 2026), while the final week of 2025 otherwise features normal stock-market hours (with bond-market timing differences). [20]
Translation for energy investors: expect lower liquidity, wider spreads, and potentially larger overnight gaps if oil or gas futures move sharply.
3) Macro headlines still matter—especially rates and the dollar
Energy stocks can behave like a macro sector when the U.S. dollar and Treasury yields swing. This week’s calendar includes items like pending home sales and the release of Fed minutes, according to Investopedia’s week-ahead rundown. [21]
While those aren’t “energy” reports, they can influence the dollar and risk appetite—both of which feed back into commodity pricing and cyclical equities.
4) Watch futures, not just Friday’s close
Oil and gas futures frequently set the tone for energy-stock premarket trading. CME quotes and exchange pricing can update outside equity hours, and even modest moves can matter more than usual when liquidity is thin. [22]
Bottom line: energy stocks are entering 2026 with higher dispersion—and more catalysts than the quiet tape suggests
Energy investors are looking at a sector that’s no longer “just oil.” The last 48 hours alone offered a crosscurrent mix:
- Spot crude weakness tied to oversupply narratives and shifting geopolitics [23]
- Firm natural gas pricing that could support gas-weighted equities and LNG-linked names in the near term [24]
- A renewed debate about whether LNG growth plans will collide with faster-than-expected renewable deployment later this decade [25]
Going into Monday, the cleanest setup is also the simplest: with U.S. equities closed today, energy stocks may take their cue from (1) where oil and gas futures trade into the open and (2) whether Monday’s EIA inventory data reinforces—or challenges—the “glut” narrative.
This article is for informational purposes only and does not constitute investment advice.
References
1. www.reuters.com, 2. www.reuters.com, 3. www.spglobal.com, 4. finance.yahoo.com, 5. www.reuters.com, 6. www.reuters.com, 7. www.reuters.com, 8. www.marketwatch.com, 9. www.marketwatch.com, 10. www.marketwatch.com, 11. www.reuters.com, 12. www.barrons.com, 13. www.ft.com, 14. www.reuters.com, 15. www.reuters.com, 16. www.reuters.com, 17. www.reuters.com, 18. www.reuters.com, 19. www.eia.gov, 20. www.investopedia.com, 21. www.investopedia.com, 22. www.cmegroup.com, 23. www.reuters.com, 24. www.marketwatch.com, 25. www.reuters.com
