MDN’s Energy Stories of Interest: Thu, Jun 5, 2025 [FREE ACCESS]
OTHER U.S. REGIONS: Republicans offer proposal to block locals from banning natural gas; NATIONAL: July natural gas contract extended rebound on Tuesday; Why predictions of “peak oil” are always wrong; The faux science of outlawing fossil fuels; INTERNATIONAL: Oil falls as Saudi Arabia seeks more major production hikes; Saudi Arabia cuts oil prices for Asia; European gas gains as traders focus on storage refill.
OTHER U.S. REGIONS
Republicans offer proposal to block locals from banning natural gas
Michigan Advance
In Michigan, Republican Representative Steve Frisbie introduced House Bill 4486 to prevent local governments from banning natural gas connections and appliances in new homes, prompted by a 2023 Ann Arbor proposal to limit gas service in new constructions. The bill, discussed in the House Energy Committee, aims to block municipalities from adopting or enforcing ordinances that prohibit natural gas use or infrastructure installation, nullifying any conflicting local laws. Frisbie’s proposal responds to concerns about local control and energy choice, with supporters arguing it ensures consumer options amid a push for electrification. However, Democrats like Rep. Julie Brixie question its necessity, noting no Michigan localities are currently pursuing gas bans, and critics view it as a distraction from broader climate goals. A similar Senate bill, SB 275, introduced by Sen. Joe Bellino, awaits a committee hearing. The debate reflects tensions between local authority and state-level energy policy. [MDN: Every state should have such a law on the books to block the radicals from trying to destroy fossil energy. Kudos to Michigan Republicans for advancing this bill.]
NATIONAL
July natural gas contract extended rebound on Tuesday
Rigzone
In recent EBW Analytics Group reports, energy analyst Eli Rubin discussed the dynamics of the natural gas market, noting that the July contract rebounded to $3.722, nearly recovering last week’s losses, though weak Henry Hub spot prices at $2.82 signal soft fundamentals that may limit short-term gains. Despite stable weather forecasts and declining cooling degree days potentially impeding price increases, rising LNG feedgas demand at Corpus Christi contrasts with ongoing maintenance at Cameron and Sabine Pass. Rubin highlighted soft production, bullish technicals, and an expected tightening of fundamentals in the coming weeks, suggesting that a close above the 20-day average of $3.749 or a warmer late-June outlook could drive prices higher. Additionally, recent market shifts, including a 24.7¢ surge in the July contract and increasing LNG demand, indicate a transition from a loose spring to a bullish summer outlook, though weak near-term physical markets may temper immediate enthusiasm. [MDN: A sort of “hedge your bets” prediction that offers insights into why the NYMEX futures price may go higher, and why it may go lower. We favor the going higher theory. Time will tell.]
Why predictions of “peak oil” are always wrong
World Oil
The article from World Oil, published on June 4, 2025, argues that predictions of “peak oil”—the point at which oil production reaches its maximum before declining—are consistently inaccurate, particularly in the context of U.S. oil production. It highlights how technological advancements, such as hydraulic fracturing and horizontal drilling, have repeatedly defied forecasts by unlocking vast shale oil reserves, transforming the U.S. into the world’s top oil producer. Despite claims from analysts like those at Kpler and the EIA, who predict a U.S. production peak by 2027 due to low oil prices and geological limits, the article emphasizes the industry’s resilience. It points to historical inaccuracies in peak oil predictions, like those in the 1970s and 2000s, and suggests that ongoing innovations and adaptability in the shale sector will likely continue to challenge such forecasts, maintaining robust U.S. oil output despite economic and policy challenges. [MDN: This excellent article was written by Wayne Christian, an elected Commissioner with the Railroad Commission of Texas, the organization that oversees Texas’ O&G regulation. We could not agree more and have said so on this site for more than 15 years—that “peak oil” (supply or demand) is not happening.]
The faux science of outlawing fossil fuels
The Daily Signal
The article from The Daily Signal critiques a Nature study by Christopher W. Callahan and Justin S. Mankin, which attempts to link extreme weather harms to major fossil fuel producers, accusing them of causing catastrophic warming without sufficient evidence. Authors Dr. Bruce Everett and Gordon Tomb argue the study ignores the benefits of CO2, such as global greening and record crop yields, and understates the role of fossil fuels in driving prosperity for a global population of 8 billion. They criticize the study’s reliance on unvalidated models and assumptions to assign a $1.98 trillion climate liability to Chevron, calling it “faux science” aimed at fueling climate litigation. The authors assert that fossil fuels have been essential since the Industrial Revolution and question the feasibility of replacing them, suggesting the study’s claims would struggle in court due to their lack of substantiation. [MDN: At some point the general public will begin to reject all of these faux science claims of catastrophic global warming. We’re still waiting for that day. Massive media brainwashing of the public has been strong and will take some time to undo.]
INTERNATIONAL
Oil falls as Saudi Arabia seeks more major production hikes
Bloomberg/Rigzone
Oil prices dropped as Saudi Arabia signaled plans for another significant production increase, raising concerns about a potential crude oversupply. West Texas Intermediate fell 0.9% to $62.85 per barrel, while Brent crude dropped to $64.86, following reports that Saudi Arabia, the de facto OPEC leader, aims to boost output by at least 411,000 barrels daily in August and possibly September to capture peak summer demand. This move aligns with OPEC+’s strategy to accelerate supply additions, though last month’s hike was less than the agreed limit. Despite a recent US crude stockpile drop of 4.3 million barrels, suggesting short-term tightness, declining gasoline demand and fears of a supply glut, coupled with Saudi Aramco’s price cuts to Asia, pressured prices. Oil is down 12% this year amid oversupply concerns and uncertainties around US trade tariffs, particularly with China, impacting market sentiment. [MDN: The price is beautiful where it is in the $60s. Keep it coming, Saudis! You’re killing yourselves.]
Saudi Arabia cuts oil prices for Asia
Bloomberg/Rigzone
Saudi Aramco reduced the price of its flagship Arab Light crude by 20 cents a barrel for Asian buyers, setting it at $1 above the regional benchmark, following OPEC+’s decision to increase production by 411,000 barrels a day in July, marking a third consecutive month of significant output hikes. This move, led by Saudi Arabia, aims to recapture market share despite contributing to a 12% drop in benchmark oil prices since April, exacerbated by U.S. trade policies. While Aramco raised prices for the U.S. by 10 cents and for Europe and the Mediterranean by $1.80, the smaller-than-expected Asian price cut reflects confidence in regional demand, especially as Saudi domestic crude use rises seasonally. However, increasing global crude stockpiles and slipping refinery profits signal that supply is outpacing demand, even as refiners benefit from strong product margins during the high-demand summer period. [MDN: The fact that the Saudis have the power to “set prices” willy-nilly, however they want to, is what irritates us. Such is the power of thug dictators.]
European gas gains as traders focus on storage refill
Wall Street Journal
European natural gas prices rise in early trade. The benchmark Dutch TTF contract is up 1.9% to 36.34 euros a megawatt hour as traders focus on replenishing storage ahead of the winter. Supply tightened as flows from Norway–Europe’s largest single supplier–declined due to a new round of planned maintenance. At the same time, forecasts of warm weather in Asia have raised the prospect of increased competition for liquefied natural gas. “Above normal temperatures are expected across China and Japan, the two biggest buyers of LNG, over the next weeks,” analysts at ANZ Research say. “Higher air-conditioning requirements or reduced hydro output could boost gas needs.” Investors are also monitoring geopolitical developments, with little progress in peace talks to end the war in Ukraine and persistent trade tensions. [MDN: Increasingly, the price of natural gas here at home is tied to the price in other regions like Europe. So, keep a close eye on what the price is doing there for a signal of what it may do here.]
I found MDN’s reply, “ [MDN: The fact that the Saudis have the power to “set prices” willy-nilly, however they want to, is what irritates us. Such is the power of thug dictators.] similar to things that are happening in our very own U.S.A.