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This is Market Pulse — Friday's Numbers

Oil
• WTI: $57.84, down 1.95%
• Brent: $62.41, down 1.53%
• WTI-Brent spread: $4.57
• Oil prices fell Friday, heading for weekly decline
• Oversupply concerns weighing on market
• Proposed U.S. peace plan to end Ukraine war softening sentiment
• Traders evaluating potential return of Russian supply to global markets
• Plan would require Ukraine to cede Donbas region, Russia rejoin G8, sanctions lifted
• Geopolitical risk premium eroding
• Stronger U.S. dollar contributing to weakness
• Sanctions on Rosneft and Lukoil due to take effect
• Trend: Oversupply fears and easing geopolitical tensions driving prices lower

Gas
• Henry Hub: $4.52, up 1.08%
• Spot price: $3.93, up $0.33 from earlier in week
• December NYMEX contract: $4.55, up 2 cents
• Natural gas up 31.08% over past month, 37.58% year-over-year
• Colder weather sending ripples through global gas markets
• Strong LNG export demand: averaging 17.8 billion cubic feet per day in November
• Traders weighing expectations for colder conditions in early December
• European natural gas futures hit 18-month low due to milder weather forecasts and Ukraine peace talks
• Ample LNG supplies expected to help Europe through winter
• Market shaped by seasonal uncertainty rather than structural scarcity

Real Estate
• Industrial cap rates continue compressing in major logistics hubs
• Southeastern markets (Savannah, Charleston, Jacksonville): 4.5% to 5.5% caps
• Atlanta: 4.75% to 6.25% depending on asset type and location
• Investors shifting capital into industrial due to consistent occupancy and stable cash flows
• Competition increasing, compressing cap rates in Southern California, Dallas-Fort Worth, Atlanta
• E-commerce demand driving last-mile distribution and cold storage
• Interest rate cuts supporting transaction activity
• Fed funds rate: 4.00% to 4.25% with further cuts expected by end of 2025 and in 2026
• Potential rates of 3.25% to 3.5% by end of 2026
• Lower borrowing costs supporting deal flow
• High land costs and permitting delays limiting new development, supporting high values for existing assets

Credit
• SOFR: 3.91%, down from 3.94% previous day
• SOFR trading above Interest on Reserve Balances rate since October
• 30-day SOFR average: 4.08%
• 90-day SOFR average: 4.22%
• 180-day SOFR average: 4.31%
• Credit markets saw volatility this week due to investor uncertainty around AI company valuations and near-term U.S. rate cuts
• Major credit market returns and emerging market currency performance negative for the week
• Financial Stability Board urged G20 leaders to monitor private credit markets and stablecoins
• Advocating for modernized financial regulations to safeguard stability
• Credit growth expectations remain solid, much from housing-related investors
• Senior secured loans with SOFR plus 650 basis points and LTV under 65% remain target
• Investors staying defensive on lower-quality credit

Bottom Line
• Oil: Target sub-$50 breakevens, hedge floors above $75—oversupply concerns and easing geopolitical tensions driving prices lower
• Gas: Selective exposure, winter contracts locked—colder weather and strong LNG demand supporting prices near-term
• Real Estate: Industrial sub-5.7% caps near logistics hubs—e-commerce demand and interest rate cuts compressing cap rates
• Credit: Senior secured, SOFR plus 650, LTV under 65%—stay defensive on lower-quality credit as volatility increases

That's your Market Pulse update.

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