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This is Market Pulse — Wednesday's Numbers

Oil Markets
• WTI Crude: $58.38 (up 0.2%)
• Brent: $62.21 (up 0.43%)
• WTI-Brent spread: $3.83
• Oil prices remained under pressure from global oversupply concerns
• U.S. crude production projected to hit record 13.6 million barrels per day in 2025
• API data showed 4.8 million barrel decline in crude inventories
• Gasoline and distillate stockpiles rose sharply
• Markets watching diplomatic efforts to resolve Russia-Ukraine conflict
• Analysts expect WTI at $60.51 by quarter end, $66.50 in 12 months

Natural Gas Markets
• Henry Hub: $4.47 (down 2.18%)
• Prices pulled back from three-year highs reached earlier this month
• Milder weather forecasts through December 23rd easing demand pressure
• Near-record production and ample storage continue to weigh on prices
• LNG export demand remains strong
• EIA projects Henry Hub will average $4.30 overall in winter 2025-26
• LSEG expects total U.S. demand (including exports) to increase to 146 bcfd next week, up from 143.8 bcfd this week

Federal Reserve Policy
• Fed concluded final policy meeting of 2025 today
• Markets priced in 85-90% probability of quarter-point rate cut
• Would bring federal funds rate to 3.50-3.75%
• FOMC appears divided, some members favor pause to ensure inflation doesn't re-accelerate
• Government shutdown delayed key economic data releases, complicating Fed's decision
• Markets watching Jerome Powell's post-announcement press conference for signals
• 10-year SOFR rate at 3.7%, expected to increase to 3.75-4%

Stock Markets
• Mixed performance ahead of Fed decision
• Options traders priced in potentially large swing in S&P 500 (possibly around 1.3%)
• Banking and IT stocks weighed on major indices
• Markets anticipating increased volatility as Fed's guidance on future rate cuts will shape investor sentiment heading into 2026

Real Estate Markets
• Showing signs of moderation
• Experts anticipate home prices to increase into 2026, but growth may remain below long-running average of 4-5%
• Inventory levels remain below buyer demand in many areas, supporting prices
• Some markets have seen surges in both existing and newly built homes
• Mortgage rates expected to drift lower toward 6% by 2026, potentially improving affordability
• Las Vegas home prices hit record high in November
• Phoenix shows signs of softening with rising inventory and price reductions
• First-time buyers remain squeezed by high costs and debt burdens

Bottom Line
• Oil: Target sub-$50 breakevens, hedge floors above $75. WTI up 0.2% to $58.38, Brent up 0.43% to $62.21. Oversupply concerns persist. API draw 4.8 million barrels. Analysts expect $60.51 by quarter end.
• Gas: Down 2.18% to $4.47. Milder weather forecasts easing demand. LNG exports remain strong. EIA projects $4.30 winter average.
• Real Estate: Prices expected to increase into 2026 but below historical average. Mortgage rates drifting toward 6%. Las Vegas hitting record highs, Phoenix softening.
• Credit: Fed meeting today, 85-90% chance of quarter-point cut to 3.50-3.75%. 10-year SOFR at 3.7%. Markets anticipating volatility.

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