Navigating A Volatile Energy Bond Market in 2H 2025: Video

Heightened volatility in the energy sector may prompt some investors to take a defensive stance, focusing on debt with higher credit ratings or in the relatively stable midstream sector. With oil prices swinging between $55 and $75 a barrel, independent producers may be as equally likely to have enough free cash flow to fund stock buybacks as they are to be forced to cut capex and production to preserve cash. Despite the uncertain outlook, credit spreads remain near historically low levels, indicating that there may be more downside risk than upside potential. Natural gas producers, however, may be well positioned to outperform following a rebound in prices to more than $3.50 per mcf.