Goldman Sachs sees resilient energy and power-demand themes, with selective opportunities amid policy, execution and commodity risks.

Overview

This cross-sector Pulse summarizes investor discussions and management-meeting takeaways across US energy, utilities and mining. Goldman Sachs identifies continued support from geopolitical and commodity volatility, accelerating power demand and tight industrial supply, while emphasizing that execution, regulatory outcomes and commodity-price assumptions remain decisive.

Core views

The report opens with Chevron’s management roundtable, where investor debate centered on geopolitical risk in international growth, Bakken strategy, Project Kilby and Kazakhstan contract extensions. Goldman Sachs argues that Chevron is assembling high-margin international options that could support 10% adjusted free-cash-flow growth by the end of the decade. It expects Venezuelan gross production to more than double to about 600 kbd by 2031 across three joint ventures, and Argentine output to more than triple to about 240 kbd by 2035. In the Permian, management is using chemical treatments that Goldman Sachs says can lift recovery in new wells by 10% and lower capital spending per barrel by roughly 25% year over year. Project Kilby, a West Texas co-located data-center project supported by a 20-year, 2.67 GW PPA, is on track for first power in 2028 and targets mid-teens returns independent of commodity prices; valuation credit, scalability and turbine competition remain investor questions. Behind-the-meter power was a major theme. Following meetings with LBRT and PUMP, Goldman Sachs sees contract negotiations advancing as hyperscalers select data-center sites and resolve water, mineral and land issues. Higher capital-spending guidance is attributed largely to broader project scope and ancillary services rather than worse economics; the firm expects returns to remain at or above original expectations, with both companies still guiding to high-teens returns over a four- to six-year payback. Goldman Sachs remains Neutral on LBRT and PUMP but identifies power-contract announcements—especially LBRT’s 500 MW ESA guide by year-end 2026—as potential catalysts. For KGS, management reiterated a target of more than 2 GW of power capacity by 2030, backed by 1.8 GW of procured equipment, including 1 GW under a Baker Hughes framework agreement. A 76 MW limited notice to proceed with NScale and prospective late-2026 or early-2027 contracts for 250-400 MW agreements could help contract remaining capacity; Goldman Sachs sees KGS’s compression-business reliability, operational experience and go-to-market strategy as advantages. In E&P, Goldman Sachs contrasts broad industry capital optimization with Murphy Oil’s exploration cycle in Vietnam and Côte d’Ivoire. MUR had risen 22% year to date versus 49% for the oil E&P group, partly reflecting mixed exploration and appraisal results and comparatively constrained cash-flow generation and capital allocation. First oil at Lac Da Vang in Vietnam is expected in 4Q26, while the Bubale prospect in Côte d’Ivoire will undergo a three-to-five-well appraisal program in 2H26 and 2027. Goldman Sachs notes that higher 2027 capital spending is possible, but an increase in the predrill 340-850 MMboe resource range would be a positive catalyst. Elsewhere in E&P, FANG trades at an 11% 2027/2028 free-cash-flow yield versus 9% for large-cap peers, while gas-focused E&Ps have underperformed the XLE by 52 percentage points year to date (-9% versus +43%) despite potential longer-term data-center demand support. For utilities, Goldman Sachs says data-center politics and the November elections have intensified debate, chiefly around project delays rather than widespread cancellations. Its regulated-utility coverage trades at 16x average 2027 P/E excluding California, while IPPs trade at 8.6x EV/EBITDA, or 7.3x excluding CEG; XLU had underperformed the S&P 500 by 26% over six months. The firm highlights DUK as relatively insulated because North Carolina has no gubernatorial election this year and constructive rate-case outcomes support possible 6-8% EPS guidance. XEL has derisked its regulatory calendar and has an earnings-growth outlook above 9% through 2030. By contrast, Goldman Sachs sees EXC as more exposed to PJM affordability constraints and headline risk, with forecast EPS growth of 6% through 2030. In California, investors are watching whether a special wildfire-reform legislative session is called and whether PG&E needs additional measures beyond its announced $2 billion reduction in its 2027 capital plan. For IPPs, conversations are shifting from new data-center PPAs toward power-market and energy-price durability; Goldman Sachs sees potential earnings revisions if power prices firm even without further data-center PPAs. The clean-technology and nuclear discussion is constructive. Goldman Sachs cites renewed optimism for US large-reactor deployment after reports of a potential US-South Korea energy investment framework exceeding $100 billion and potentially supporting up to eight reactors. Industry discussions indicated that EPC contractors are increasingly willing to fix prices on 25%-40% of their work scope, although full construction wraps and robust cost-mitigation insurance remain difficult to obtain. Commercial traction is building in Generation III technologies, including GE-Hitachi’s BWRX-300 and Rolls-Royce’s SMR, alongside early progress in select Generation IV reactors. The timing of final investment decisions remains uncertain, but Goldman Sachs views the momentum as positive for nuclear equipment providers and uranium developers. Potential Kazatomprom production cuts could tighten supply further and reinforce a structural uranium deficit, supporting its bullish view on UEC. In steel, management and value-chain meetings indicated solid order books, backlogs into 2027, reshoring activity and power demand. Data centers and border-wall construction are supporting steel consumption and offsetting weaker residential construction and appliance demand. Goldman Sachs’ supply-demand tracker showed 0.9% seasonally adjusted growth to date, with the firm expecting roughly 2.5% full-year 2026 growth. Limited spot availability and a thin supply market are expected to raise near-term prices; reduced fixed contracts and discounts could extend higher pricing into 2027. Goldman Sachs expects the backdrop to favor flat-roll producers, citing NUE’s rising flat-rolled exposure to 54% in 2027 from 49% in 2025, STLD’s exposure to hot-rolled coil and value-added steel, and CLF’s planned contract renegotiations in 1Q27. Additional investor debates span refining, energy services and pipelines. A hypothetical US refined-product export ban could pressure refining margins, though some investors view it as unlikely because prior export bans led to higher product prices through lower utilization and adverse implications for Latin America and Europe. PSX and DINO have diversified earnings streams, while VLO, MPC and PARR have higher beta to elevated refining margins. Baker Hughes investors are focused on the acquired GTLS business, including guidance for 22-23% segment EBITDA margins by 2028 versus 17.5% in 2H26, plus LNG, data-center and turbine-order opportunities. In midstream, PAA’s $585 million Silver Creek acquisition and ENB’s proposed 2 bcf/d West Texas Express project have focused attention on PRB development, Waha takeaway needs, competitive pipeline economics and future Rockies-to-Cushing and Southwest-market pricing. The report’s market-context exhibits indicate that E&P valuations imply WTI slightly below the five-year strip. Gas-focused E&Ps broadly imply a roughly $3.40/MMBtu long-term gas price at $70/bbl WTI, compared with Goldman Sachs’ $3.50/MMBtu mid-cycle view and 2026/2027/2028 gas futures of approximately $3.51/$3.28/$3.75 per MMBtu. It also notes that a 4.9% 10-year Treasury yield has been a utility headwind and that global diesel demand declined 4% in May-July, while more substantial gasoline-demand curbs would require higher gasoline prices.

Analysis framework

Goldman Sachs synthesizes discussions from conferences, management meetings and investor inbound questions, then tests company and sector debates against operating targets, project milestones, supply-demand conditions, valuation measures and its own forecasts. The report uses relative valuation, free-cash-flow yield, earnings and EBITDA multiples, and project-level timing to frame potential catalysts and risks.

Methodology notes

• Industry AnalysisSupply-demand framework

  Supply-demand analysis of power, uranium, natural gas, refined products and steel.

  The report links tight power supply, uranium production risks, pipeline capacity, limited steel spot availability and end-market demand to pricing, project economics and company outcomes.

• Valuation methodsEV/EBITDA valuation

  Enterprise-value-to-EBITDA multiple valuation.

  Goldman Sachs applies EV/EBITDA multiples to several covered companies, including KGS, UEC, NUE and STLD, to derive target prices or compare sector valuation.

• Corporate Fundamentals and FinanceFree cash flow analysis

  Free-cash-flow growth and yield analysis.

  The report uses free-cash-flow growth, adjusted free cash flow, yield and capital-allocation implications to assess Chevron, MUR, FANG, gas E&Ps and other energy companies.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Chevron Corp. (CVX)

  International growth projects, Permian efficiency gains and Project Kilby may support free-cash-flow growth.

  Strengths

  High-margin international growth options; Permian cost and recovery improvements; 20-year Project Kilby PPA.

  Risks

  Commodity prices, refining margins, operational execution and geopolitical-risk concerns.

• Kodiak Gas Services (KGS)

  Behind-the-meter power deployment could expand contracted capacity and leverage its compression operating record.

  Strengths

  Target of more than 2 GW by 2030, 1.8 GW of equipment procured, and established reliability with hyperscalers.

  Weaknesses

  Next-stage growth beyond 2 GW depends on successful execution of initial contracts.

  Comparison

  Goldman Sachs sees experience and reliability as competitive advantages where pricing and contract terms are becoming standardized.

  Risks

  Demand reduction, higher costs, supply-chain constraints, inability to secure contracts or equipment, balance-sheet constraints and market discipline.

• Murphy Oil Corp. (MUR)

  Vietnam first oil and Côte d’Ivoire appraisal results are key to the exploration-led growth case.

  Strengths

  Potential resource upside if Bubale appraisal raises the predrill 340-850 MMboe range.

  Weaknesses

  Cash-flow generation and capital allocation are more constrained during the current exploration cycle.

  Comparison

  MUR rose 22% year to date versus 49% for Goldman Sachs’ oil E&P coverage.

  Risks

  Higher costs, weak well results, commodity volatility and government pronouncements.

• Duke Energy Corp. (DUK)

  A relatively insulated regulatory position and constructive rate-case outcomes support the earnings outlook.

  Strengths

  North Carolina has no gubernatorial election this year; possible EPS guidance of 6-8%.

  Comparison

  Goldman Sachs screens DUK as less exposed to election-related headline risk than some peers.

  Risks

  Balance-sheet improvement, rate-case uncertainty and weaker load-growth forecasts.

• Xcel Energy Inc. (XEL)

  Regulatory-calendar derisking and renewable and transmission exposure underpin the constructive view.

  Strengths

  Earnings-growth outlook above 9% through 2030 and a strong execution track record.

  Comparison

  Goldman Sachs identifies XEL as comparatively insulated from election noise.

  Risks

  Negative rate-case outcomes, litigation, ROE execution and cost management.

• Exelon Corp. (EXC)

  PJM affordability constraints and political noise weigh on the regulatory and earnings outlook.

  Weaknesses

  Limited near-term regulatory catalysts and Goldman Sachs forecasts 6% EPS growth through 2030.

  Comparison

  Goldman Sachs identifies EXC as more negatively affected by political noise than DUK and XEL.

  Risks

  Regulatory outcomes, cost management, balance-sheet considerations and uncertainty around incremental capital expenditure.

• Uranium Energy Corp. (UEC)

  Potential reactor deployment and uranium supply restraint support the uranium outlook.

  Strengths

  Potential beneficiary of nuclear-equipment momentum and a possible structural uranium-market deficit.

  Weaknesses

  Production-ramp timing remains uncertain.

  Risks

  Volatile or subdued uranium prices, higher production costs and liquidity-driven dilution.

• Nucor Corp. (NUE), Steel Dynamics Inc. (STLD), Cleveland-Cliffs Inc. (CLF)

  Tight flat-roll steel supply and higher-for-longer pricing could support earnings.

  Strengths

  NUE is expanding flat-rolled exposure; STLD has HRC and value-added exposure; CLF is preparing contract renegotiations.

  Weaknesses

  Cyclical cash flows remain sensitive to pricing and supply additions.

  Comparison

  Goldman Sachs expects the strong pricing environment to continue through 2027.

  Risks

  Scrap-cost inflation, tariff reductions, added domestic capacity and slower economic growth.

Key data

• Chevron Venezuela production~600 kbd by 2031Expected gross production across three joint ventures; more than double current levels.
• Chevron Argentina production~240 kbd by 2035Expected output; more than triple current levels.
• Project Kilby PPA20 years, 2.67 GWCo-located West Texas data-center project; first power targeted for 2028.
• KGS power-capacity target>2 GW by 2030Supported by 1.8 GW of procured equipment.
• MUR relative performance+22% vs. Oil E&Ps +49% year to dateReported underperformance during its exploration cycle.
• Utility valuation16x average 2027 P/E; IPPs at 8.6x EV/EBITDARegulated utility valuation excludes California; IPP multiple is 7.3x excluding CEG.
• Steel-demand growth~2.5% for full-year 2026Goldman Sachs expectation; its tracker indicated 0.9% seasonally adjusted growth to date.
• Gas valuation reference~$3.40/MMBtu implied long-term gas priceVersus Goldman Sachs’ $3.50/MMBtu mid-cycle view at $70/bbl WTI.

Impact & implications

Goldman Sachs views power demand, international oil growth, nuclear deployment and constrained steel supply as supportive sector forces, but says outcomes will depend on contract execution, equipment availability, commodity prices, regulatory decisions and the pace of infrastructure development. The report favors selective exposure rather than a uniform sector conclusion.

Risks

• Chevron’s international growth may face geopolitical-risk discounts, while commodity prices, refining margins and execution remain risks.
• Behind-the-meter projects face risks around contract timing, financing, equipment procurement, costs and power availability.
• Utility and IPP projects may be delayed by election-related policy uncertainty, data-center opposition and regulatory outcomes.
• Nuclear construction timing, full-project cost wraps and cost-mitigation insurance remain uncertain.
• MUR’s exploration program could require capital spending above current 2027 estimates if appraisal activity expands.
• Steel prices could weaken if tariffs are reduced, domestic capacity expands or US demand slows.

What to watch

• Chevron updates on Venezuela, Argentina, Iraq commercial discussions, Kazakhstan contract extensions and Project Kilby’s 2028 first-power schedule.
• LBRT and PUMP power-contract announcements, including LBRT’s 500 MW ESA guide by year-end 2026.
• KGS contract awards for its remaining capacity and evidence of execution before expansion beyond 2 GW.
• MUR first oil at Lac Da Vang in 4Q26 and Bubale appraisal results during 2H26 and 2027.
• November-election developments, California wildfire-reform actions, Texas data-center audit progress and PJM regulatory outcomes.
• Nuclear final investment decisions, uranium-supply developments and potential Kazatomprom production cuts.
• Steel spot availability, pre-quarter guidance, tariff developments and evidence that elevated pricing persists into 2027.