Strategic Opportunities for Oil & Gas Investors: Highlights from the November 2025 Short-Term Energy Outlook

The U.S. Energy Information Administration’s (EIA) Short-Term Energy Outlook (STEO) for November 2025 updates the forward view on crude oil, natural gas, and power markets through 2026. For accredited investors needing tax breaks, looking to park money efficiently before year-end, or building long-term exposure to oil and gas well exploration, Bass Energy Exploration (BassEXP) translates this outlook into specific drilling, capital allocation, and tax-planning strategies.

Across the report, several themes stand out: a still-balanced but softer global oil market, sustained strength in U.S. crude production led by the Permian, firmer natural gas prices driven by LNG exports and tighter storage, and ongoing growth in renewable generation alongside robust gas-fired power demand. Together, these signals reinforce the value of timing drilling decisions, front-loading intangible drilling cost (IDC) expenditures, and using oil and gas investments as a tool for strategic tax breaks when you need to park money before April 15.

Why the November STEO Matters for Oil & Gas Investing

BassEXP uses each monthly STEO as a macro “dashboard” to refine how and when we:

• Schedule and sequence oil and gas well exploration and completions
• Allocate IDCs to maximize immediate tax breaks for investors needing a tax break in the current year
• Choose between oil-weighted, gas-weighted, or balanced drilling programs
• Structure working-interest and partnership agreements to align with forecast price and demand conditions

The November 2025 STEO reinforces a few practical points for investors:

• Oil prices are expected to remain in a moderate range – high enough to support disciplined drilling but not so high that they invite extreme volatility.
• Natural gas remains structurally strong, with prices supported by global LNG demand and lower-than-average storage.
• Electricity demand and industrial activity remain healthy, supporting diesel, NGL, and natural gas demand into 2026.

For high-net-worth investors who need tax breaks or need to park money in a tax-advantaged vehicle before year-end, this environment favors direct oil and gas investing with carefully structured IDCs and depletion deductions.

Global Oil Market: Prices, OPEC+ Strategy, and Inventories

Brent and WTI Price Trajectory

The November STEO continues to show Brent crude oil prices in a mid-range band, with calendar-year 2025 and 2026 averages in the high-$60s to low-$70s per barrel. That’s consistent with:

• Steady global consumption growth (mainly non-OECD Asia)
• Continued—but more measured—supply increases from OPEC+ and key non-OPEC producers
• Inventory levels that are neither critically tight nor oversupplied

For BassEXP and its investors, this reinforces a strategy of disciplined, high-quality drilling rather than speculative chasing of price spikes. Wells should be engineered and financed to make economic sense in the high-$60s range, with upside if prices surprise to the upside.

OPEC+ and Inventory Balances

The STEO still assumes that OPEC+ gradually unwinds voluntary cuts, but with flexibility to pause or reverse if prices fall too far. At the same time, non-OPEC supply from the U.S., Canada, Brazil, and Guyana continues to grow.

Result:

• Modest inventory builds at times during 2025–2026
• A market where price spikes are possible, but the baseline is a managed, sideways environment

BassEXP translates this into front-loaded project planning:

• Prioritize drilling programs that can spud and complete wells into a reasonably supportive price environment
• Avoid over-leveraging on aggressive price decks
• Use STEO scenarios as a guardrail when modeling payout, ROI, and net present value (NPV) for new oil well investments

U.S. Crude Oil Production: What It Means for Drilling Timing

The November STEO continues to show record or near-record U.S. crude oil production, with national output in the mid-13 million barrels per day range. Growth slows versus prior years, but:

• The Permian Basin remains the engine, with further gains from productivity improvements and incremental takeaway capacity
• Other tight oil plays (Bakken, Eagle Ford, DJ/Niobrara) remain more stable or slightly down, reflecting capital discipline

For investors, that means:

• The U.S. remains a competitive, low-cost source of barrels, especially in the Permian
• Project quality matters more than ever—wells must “live” at STEO price decks, not heroic assumptions
• BassEXP’s focus on conventional and tight-oil drilling in proven geologic fairways is aligned with this environment

When a client needs a tax break or needs to park money quickly, we lean into projects with shorter cycle times and clear line-of-sight to completions, so IDC spending and first production line up with both tax deadlines and forecasted market conditions.

Natural Gas Outlook: LNG Exports, Storage, and Henry Hub

Henry Hub Price Path

The November STEO maintains a firm outlook for Henry Hub prices, generally in the low-to-mid-$4 per MMBtu range for 2025 and slightly higher into 2026. Drivers include:

• Above-trend LNG export growth, as new U.S. facilities ramp and global buyers seek reliable supply
• Tighter storage balances, often projected below the five-year average outside of shoulder seasons
• Steady industrial and power-sector gas demand, even as renewables expand

For investors considering gas well investing, this is a strong setup:

• Higher natural gas prices improve well economics and speed payout
• IDCs allocated to gas-centric drilling programs can generate immediate tax breaks, while future cash flows reflect a structurally stronger gas market

LNG and Global Demand

With several U.S. LNG export projects entering service, the STEO confirms:

• The U.S. remains a critical swing supplier in global gas markets
• LNG volumes continue to grow, anchoring domestic demand even if weather fluctuates

BassEXP sees this as a green light for selective natural gas drilling, especially when:

• Investors need to park money before year-end in a tax-efficient vehicle
• IDC allocations can be harvested for immediate deductions, while production revenue participates in the global LNG-linked gas price uplift

Power Markets: Renewables Expansion and Gas-Fired Generation

The November STEO maintains a consistent narrative:

• Renewables (especially solar and wind) continue to grow, capturing a larger share of U.S. electricity generation
• Natural gas remains the largest single contributor to generation for the foreseeable future
• Coal generation stays relatively stable or gradually declines, depending on prices and retirements

For oil & gas investing, power market forecasts matter because they shape:

• Long-term natural gas demand
• The outlook for NGLs and distillate demand in sectors tied to industrial growth

BassEXP uses these power sector insights when planning gas-focused drilling programs and modeling long-term demand for associated liquids.

Using the November STEO to Shape Deal Structures and Tax Strategy

Connecting STEO to IDC Timing and Tax Breaks

Many BassEXP investors approach us near year-end because they:

• Need a tax break to reduce this year’s federal tax bill
• Need to park money in a higher-yield, tax-advantaged vehicle instead of leaving it idle in cash or plain equities

The November STEO helps us decide:

• How aggressively to schedule spuds and completions to maximize IDCs in the current tax year
• Whether to emphasize oil-weighted or gas-weighted projects based on updated price and demand forecasts
• How to structure working interest, carried interest, and revenue distributions to work at STEO price assumptions

Well-designed programs can allow:

• 65–80% of the initial investment to be treated as IDCs, often 100% deductible in the first year (subject to tax rules and individual circumstances)
• Remaining tangible drilling costs (TDCs) to be depreciated over time
• Depletion allowances and other oil and gas investment tax benefits to compound long-term after initial tax breaks

Multi-Well Aggregators and Risk Management

For investors who want diversification across wells and horizons, STEO is central to how we design multi-well aggregator structures:

• Allocate IDCs across a series of wells, providing multiple opportunities for payout and tax deductions
• Blend oil and gas prospects to reflect the relative strength of Brent and Henry Hub curves
• Use phased capital calls so you can park money when you need the tax break, and deploy additional capital as macro conditions evolve

Why Partner with Bass Energy Exploration (BassEXP)

BassEXP stands at the intersection of subsurface expertise, disciplined field operations, and macro-driven planning. The November 2025 STEO is one of the tools we use to ensure that:

• Drilling schedules line up with projected price environments
• IDC windows are aligned with investors’ tax calendars
• Overhead and operating structures remain resilient even if prices undershoot forecasts

Our role is to turn EIA’s high-level charts and tables into concrete decisions: which prospects to drill, when to drill them, and how to structure working interests, carried interests, and revenue sharing so that investors needing a tax break or needing to park money get both near-term tax value and long-term cash flow potential.

Next Steps with BassEXP

For accredited investors who:

• Expect a large tax bill this year and need a tax break
• Want to park capital into a real-asset strategy with strong cash-flow potential
• Are evaluating oil well investing, gas well investing, or multi-well aggregator programs

…the November 2025 STEO offers a timely backdrop for action.

Bass Energy Exploration can walk you through:

• How current STEO forecasts affect specific drilling projects
• What level of IDC you can reasonably expect from a given program
• How oil and gas investment tax benefits—IDCs, depletion, and active-loss treatment—may apply in your situation (in coordination with your tax advisor)

If you’re ready to translate the November STEO into a tailored, tax-efficient oil and gas investment strategy, contact BassEXP. Together, we can align subsurface opportunity, market forecasts, and tax planning into one cohesive, high-conviction plan for the year ahead.

Statement

The information provided in this article is for informational purposes only and should not be considered legal or tax advice. We are not licensed CPAs, and readers should consult a qualified CPA or tax professional to address their specific tax situations and ensure compliance with applicable laws.