MDN’s Energy Stories of Interest: Mon, Jun 9, 2025 [FREE ACCESS]

OTHER U.S. REGIONS: Gulf of America oil and natural gas production expected to remain stable through 2026; Southern California air regulators weigh a plan to phase out gas furnaces, water heaters; INTERNATIONAL: Morgan Stanley says OPEC+ quota hikes yet to deliver oil surge; Oil rises as solid USA jobs data pushes algos to drop short bets; Ukraine plots fracking revolution.

OTHER U.S. REGIONS

Gulf of America oil and natural gas production expected to remain stable through 2026
U.S. Energy Information Administration – Today in Energy
The U.S. Energy Information Administration’s Short-Term Energy Outlook projects Federal Offshore Gulf of America (GOA) crude oil production to rise from 1.77 million barrels per day (b/d) in 2024 to 1.80 million b/d in 2025 and 1.81 million b/d in 2026, contributing about 13% of U.S. crude oil production. Natural gas production is expected to decline from 1.79 billion cubic feet per day (Bcf/d) in 2024 to 1.72 Bcf/d in 2025 and 1.64 Bcf/d in 2026, representing 1% of U.S. marketed natural gas. Thirteen new fields, including Whale, Ballymore, and Dover, which began production in 2025, and others like Shenandoah and Salamanca starting later in 2025 and 2026, will drive this growth. These fields, utilizing subsea tiebacks and new Floating Production Units, are expected to add 85,000 b/d of oil in 2025 and 308,000 b/d in 2026, with associated gas production rising modestly. However, above-normal hurricane activity forecast for 2025 could disrupt these timelines. [MDN: The thing that caught our attention is that offshore natural gas is only 1% of all marketed gas in the U.S. That number used to be much higher prior to the shale energy miracle.]

Southern California air regulators weigh a plan to phase out gas furnaces, water heaters
ABC News
In Southern California, the South Coast Air Quality Management District is considering rules to reduce harmful emissions from gas-powered furnaces and water heaters, targeting smog-causing nitrogen oxides (NOx) linked to respiratory issues, asthma, and premature deaths. The proposed regulations, set to begin in 2027, aim to phase out sales of these appliances, starting at 30% and reaching 90% by 2039, with manufacturers facing fees for non-compliance. Expected to prevent 2,490 premature deaths and 10,200 asthma cases over 26 years, the rules align with California’s 2045 net-zero carbon goal. Despite strong public support from clean air advocates, opposition from property owners, industry professionals, and gas companies cites potential cost increases and power grid strain. The rules, a significant rollback from an earlier zero-emissions mandate, would impact over 10 million appliances in 5 million buildings, promising improved public health and lower energy bills, though critics argue they could burden consumers financially. [MDN: This is out-of-control stupidity and Communism. It must be stopped, period. We suspect it will be stopped.]

INTERNATIONAL

Morgan Stanley says OPEC+ quota hikes yet to deliver oil surge
Bloomberg/Rigzone
Despite OPEC+ increasing oil production quotas by about 1 million barrels per day from March to June, Morgan Stanley reports that actual output has not significantly risen, with little evidence of increased production in Saudi Arabia. The alliance’s unexpected move to relax supply constraints aims to reclaim market share from rival producers and address internal quota violations, amid concerns over weakening demand due to trade frictions. Morgan Stanley’s analysis, based on data like refinery throughput, cargo exports, and pipeline flows, suggests that production increases may still occur, projecting a 420,000-barrel-per-day rise from core OPEC+ members by September, with Saudi Arabia contributing significantly. The bank also anticipates a global oil surplus, as non-OPEC+ supply growth of 1.1 million barrels per day outpaces demand growth of 800,000 barrels per day in 2025, potentially softening the market. Brent crude, down 11% this year, is forecasted to average $57.50 per barrel in the second half. [MDN: So, for all of the blustering about increasing production, it hasn’t actually happened to any great degree. We keep reading about oil slipping into the $50s, and maybe it will, but so far, it has remained solidly in the $60s, which is “perfect” territory for us.]

Oil rises as solid USA jobs data pushes algos to drop short bets
Bloomberg/Rigzone
Oil prices surged nearly 2%, with West Texas Intermediate settling above $64 a barrel, driven by stronger-than-expected US jobs data for May, which alleviated fears of an economic slowdown and reduced concerns about declining oil demand. The positive economic indicators, coupled with optimistic US-China trade talk developments, prompted algorithmic traders to cut back on bearish positions, with commodity trading advisers reducing their short positions in WTI from 64% to 9%. This shift contributed to crude’s largest weekly gain since November, supported by a risk-on market sentiment. Despite the rally, oil prices remain rangebound, trading within a $5 band since mid-May, with volatility at its lowest since early April. However, concerns persist due to trade tensions and OPEC+ increasing supply faster than anticipated, while US oil rig counts dropped to a four-year low, signaling expectations of weaker global demand. [MDN: WTI for July delivery rose 1.9% to settle at $64.58 a barrel in New York. Brent for August settlement added 1.7% to settle at $66.47 a barrel. Still in perfect territory.]

Ukraine plots fracking revolution
London (UK) Telegraph
Ukraine is pursuing a fracking revolution to tap its vast shale gas reserves, aiming to become a major energy exporter and bolster its post-war economic recovery, according to a June 9, 2025, article in The Telegraph. The Zelensky administration is streamlining regulations and seeking foreign investment and advanced drilling technology, particularly from the U.S., to exploit the Oleska shale block, estimated to hold 0.8 to 1.5 trillion cubic meters of gas. This could meet Ukraine’s domestic needs for decades and transform Europe’s energy markets, which have been strained since Russian gas exports via Ukraine ceased in 2025. Despite past challenges, such as Chevron’s withdrawal in 2014 due to tax reform issues, Kyiv is now focusing on the Lviv-Lublin geological area and engaging Western partners at forums like the Baku Energy Forum to secure high-risk capital and technology to unlock its shale potential. [MDN: An interesting twist in the ongoing war with Russia. Welcome to the fracking club!]