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May 19 (Reuters) -

By Liz Hampton

U.S. energy markets editor

Hello Power Up readers! Oil prices are jumping around to start the week, first trading in negative territory after Moody's downgrade of the U.S. sovereign credit rating and official data out of China showed slowing industrial output and retail sales. By midday prices turned positive. Brent crude futures were trading around $65.58 a barrel, up 18 cents, while U.S. West Texas Intermediate $(WTI)$ futures were trading at $62.82 a barrel, up 32 cents. Henry Hub natural gas futures were down 5.5% to $3.15 per million British thermal units.

Blackstone Infrastructure on Monday said it would acquire New Mexico-based utility company TXNM Energy in a $11.5 billion deal, marking the latest bet on rising U.S. electricity demand and a shift to cleaner energy.

TXMN Energy provides electricity to 800,000 homes and businesses across Texas and New Mexico. Its shares were up more than 9% following the deal announcement.

U.S. power demand is expected to reach record levels in 2025, driven by rising energy needs from AI and cryptocurrency data centers, electrification of various industries, and rising residential and commercial demand. Utilities have announced billions of additional dollars in spending this year to meet that rising demand, with some doubling their five-year investment plans.

The U.S. Energy Information Administration sees power demand rising to 4,205 billion kilowatt hours (kWh) in 2025 and 4,252 billion kWh in 2026, compared with a record 4,097 billion kWh in 2024.

As a result, dealmaking in the power sector is heating up. NRG last week said it would acquire power generation assets from infrastructure investment firm LS Power in a $12 billion deal, while KKR and PSP Investments earlier this year bought a 20% stake in American Electric Power's transmission network for $2.82 billion.

And Constellation Energy in January said it would buy privately held Calpine for $16.4 billion in one of the country's biggest-ever power industry acquisitions. That deal, which would make Constellation the largest independent U.S. power company, is still awaiting approval from the Federal Energy Regulatory Commission.

There is risk that some of the projected demand is overstated. For example, tech companies have approached multiple power utility providers in certain areas to seek bids for the same projects, inflating demand outlooks, Laila Kearney and Seher Dareen reported earlier this year.

In other corners of the energy world, the United Arab Emirates plans to boost its energy investments in the United States to $440 billion over the next decade, up from $70 billion currently, the nation said on Friday, as U.S. President Donald Trump aimed to secure business deals on his Gulf tour.

The commitment was announced during the last stage of the U.S. president's trip. The visit has also draw financial pledges from Saudi Arabia and Qatar.

Exxon Mobil and Japanese company Inpex are expanding capacity in Abu Dhabi's Upper Zakum offshore file, and Occidental Petroleum is looking to boost capacity in the Shah gas field. Shale producer EOG Resources has also won an exploration concession in the country's Al Dhafra region.

We also have a nice look at the Trans Mountain Pipeline expansion one year into its completion. China has emerged as a top buyer for crude shipped on the line due to trade tensions and as it seeks to diversify crude sources amid sanctions on countries like Russia and Venezuela.

China took an average of 207,000 barrels per day of Canadian crude since the expansion ramped up, versus just 7,000 bpd in the decade to 2023, Amanda Stephenson and Arathy Somasekhar report. The United States took 173,000 from the pipeline since the expansion began operations.

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Asian spot prices for liquefied natural gas were up for a second week as demand rose and industrial sentiment improved on news of the 90-day tariff truce between the United States and China. The average price for July delivery into northeast Asia was $11.75 per million British thermal units, versus $11.50 per mmBtu last week.

Chevron, along with several European companies, are in talks with the Trump administration to obtain approval to keep stakes in their joint ventures with Venezuela's state-run PDVSA. This comes after Washington in March revoked licenses it had granted in recent years for PDVSA's foreign partners and customers to do business with Venezuela, which is subject to U.S. sanctions.

The Netherlands will postpone tenders for two offshore wind farms due to lack of interest from potential bidders, its government said on Friday. The farms would have had total capacity of 2 gigawatts (GW) and had been planned for September. The Dutch government now plans to open one tender for a location in the North Sea with 1 GW capacity.

U.S. energy companies cut the number of drilling rigs in operation for a third week in a row last week, oilfield services firm Baker Hughes said on Friday. The rig count fell by two to 576, its lowest level since January. Operators dropped one oil rig and one gas rig.

Canadian oil producer Strathcona is planning a $4.25 billion hostile bid for MEG Energy. The all-cash-and-stock offer was announced late on Thursday. The deal would combine two of Canada's largest pure-play thermal oil sands operators and create the country's fifth-largest oil producer.

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(Editing by Mark Porter)