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Weekly Energy Industry Summary

Commodity Fundamentals

Week of May 11, 2026

By the Numbers:
 
  • Prompt month natural gas settled at $2.91/MMbtu, up $.15 on Monday, May 11.
  • One week ago, prompt month natural gas settled at $2.87/MMbtu.
  • Prompt month crude oil (WTI) settled at $97.49/bbl., up $2.07 on Monday, May 11.

Natural Gas Fundamentals - Neutral

  • The weather picture is changing.  The very cool spring in the East is giving way to a more seasonal early summer outlook.  With that comes some offset in late-season heating load in the northern tier that gets replaced by air-conditioning load.  The offset favors the demand side over the coming two weeks.
  • Production is tapering but very slowly.  Production of natural gas, month-to-date averaged 108.7 Bcf per day, a strong level but about one Bcf per day less than the past two months. 
  • The supply/demand balance is tightening.  Summer power-generation loads are nearing. The market condition is "neutral" for now.

Crude Oil - Bullish

  • Crude (prompt-month WTI) settled at $97.49/bbl., up $2.07 on Monday, May 11.
  • President Trump said the ceasefire with Iran was on "life support" after rejecting Tehran's latest proposal to end the war.
  • As of this writing, WTI was up 3.6% in morning trading.
  • China is reportedly urging Iran to reopen the Strait of Hormuz.
  • Some shift to kinetic military action has been much discussed among defense analysts.
  • Bullish for longer and until further notice.

Economy - Neutral

  • Consumer prices rose 3.8% annual in April, the highest since May 2003.
  • Treasury yields push higher after CPI climbs to highest in nearly three years.
  • Nonfarm payrolls rose 115,000 in April, well ahead of the consensus estimate of 55,000.
  • Unemployment held at 4.3%.
  • Average hourly earnings increased 3.6% on an annualized basis.

Weather - Neutral/Bullish

  • The very cool May in the eastern half of the U.S. is coming to an end.
  • The pattern flips to warmer-than-normal next week.
  • Temperatures will be on the warm side of "normal" in the 11-15 day period in the eastern half of the U.S.
  • Very high temperatures in the west and southwest will ease to more seasonal levels.

 

 

Weekly Natural Gas Report

  • Inventories of natural gas in underground storage for the week ending May 1 are 2,205 Bcf; an injection of 63 Bcf was reported for the week ending May 1. Stocks were 75 Bcf higher than this time last year and 139 Bcf above the five-year-average.
Values reflect week ending May 8, 2026
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Prices reflect week ending May 8, 2026

Weekly Power Report:

Mid-Atlantic Electric Summary

  • The Mid-Atlantic Region’s forward power prices were lower on the week, as stable natural gas production, seasonal demand and lower LNG feedgas send-outs kept prices at bay most of the week.  The weather pattern from the past two weeks will continue this week, with cooler-than-normal conditions across the eastern United States and heat building in the West. This will bring rain and chilly air to the East, with temperatures in the 100s in the Southwest and 90s across the interior West.  The pattern changes later this week as upstream signals flip directions, reducing heat in the West and bringing warmth across the eastern United States.  The forward electricity prices for the 2027-2030 strips were -2% lower, on average, across most terms over the past week.  The final, day-ahead settlement price for April at West Hub was $52.23/MWh or was 9% higher than March’s final settlement price average.
  • PJM Releases Holistic Market Review Paper - On 5/6, PJM published the market investment Incentives paper Powering Reliability Through Market Design, that the PJM Board requested earlier this year to evaluate ways in which the PJM market could evolve to address growing demand.  The paper identifies three general pathways for consideration: implementing longer-term capacity procurements, assuming resource adequacy shortfalls will persist and rationing resource adequacy as a scarce good, or relying more heavily on day-ahead and real-time energy markets for revenue adequacy with capacity auctions serving their initially-intended purpose of supplemental revenues needed to meet resource adequacy.  PJM acknowledges that elements of each pathway are not mutually exclusive and could be combined.

Great Lakes Electric Summary

  • The Great Lakes Region’s forward power prices were lower on the week, as stable natural gas production, seasonal demand and lower LNG feedgas send-outs kept prices at bay most of the week.  The weather pattern from the past two weeks will continue this week, with cooler-than-normal conditions across the eastern United States and heat building in the West. This will bring rain and chilly air to the East, with temperatures in the 100s in the Southwest and 90s across the interior West.  The pattern changes later this week as upstream signals flip directions, reducing heat in the West and bringing warmth across the eastern United States.  The forward electricity prices for the 2027-2030 strips were -3% lower, on average, across most terms over the past week.  The final day-ahead settlement price average in COMED for the month of April was $24.37/MWh or was -17% lower than March’s final price, while in AdHub that average price for the month of April was $45.40/MWh or was 4% higher than March’s final average.  In Michigan, that final settlement price average for April was $40.73/MWh or was 3% higher than the March average, while in Ameren the final day ahead price was $29.88/MWh or was -4% lower than the March average.
  • PJM Releases Holistic Market Review Paper - On 5/6, PJM published the market investment Incentives paper Powering Reliability Through Market Design, that the PJM Board requested earlier this year to evaluate ways in which the PJM market could evolve to address growing demand.  The paper identifies three general pathways for consideration: implementing longer-term capacity procurements, assuming resource adequacy shortfalls will persist and rationing resource adequacy as a scarce good, or relying more heavily on day-ahead and real-time energy markets for revenue adequacy with capacity auctions serving their initially-intended purpose of supplemental revenues needed to meet resource adequacy.  PJM acknowledges that elements of each pathway are not mutually exclusive and could be combined.

Northeast Energy Summary

  • New England energy forward prices continue to be volatile driven by geopolitical risks in the Middle East as the correlation with global natural gas prices persists due to LNG import cargoes to the region periodically throughout the year and their particular importance in the winter. Additionally, we've seen a new driver of price volatility in the recent increase in Regional Greenhouse Gas Initiative (RGGI) CO₂ allowance prices. RGGI is a cap‑and‑trade program, in which 10 Northeast and Mid-Atlantic states participate in that requires power generators to purchase allowances for the carbon emissions associated with producing electricity. When allowance prices rise, generator costs increase, and those costs are reflected in settled index prices and in turn, forward power prices. Allowance prices have moved sharply higher in recent weeks following Virginia’s decision to rejoin RGGI. On April 24, Virginia filed updated regulations enabling the state to participate in the program again starting July 1, with participation in RGGI auctions later this year. In addition, upcoming program changes beginning in 2027 are expected to further tighten emissions limits over time. Together, these developments have increased demand for allowances and pushed prices into the  low $50s per short ton CO2 (~50% increase in the span of 2 weeks) early last week. Shortly following the price rally, RGGI issued a statement stating that there was plenty of supply on the market of the required carbon allowances and sustained high price volatility is not the intended objection of " a reliable, affordable, and clean electricity supply". Shortly following the release, prices fell to the upper $30s/short ton. Despite the assuages RGGI, on July 1 carbon‑emitting generators in Virginia will enter the market for allowances, but they will not have an opportunity to procure them through the quarterly auctions until September. This timing mismatch is creating a supply crunch for the summer. If there is an expectation of a hotter‑than‑normal summer with increased cooling demand, those generators are likely to run more frequently, requiring them to procure additional allowances—further fueling the ongoing buying rally. Electricity buyers of forward term energy contracts in the Northeast should expect further volatility in the allowance market and, consequently forward energy prices. The RGGI three-year compliance window ends on December 31, 2026, which could create further volatility in the 4th quarter. 
  • NYISO recently notified the Department of Environmental Conservation (DEC) that Alpha Generation’s barge-mounted peaker plants in Brooklyn (Gowanus and Narrows, ~609 MW) must remain operational through 2029 to address near-term reliability risks as soon as this summer under extreme heat conditions.  In its Short-Term Reliability Process report, NYISO cites thinning dispatchable capacity - more than 1,600 MW of dispatchable fossil generation retired since 2023 under the state’s peaker plant emissions rules - as increasing operational challenges.  The state has no role in reviewing NYISO’s decision under DEC’s peaker emissions regulations.  Alpha Generation has subsequently withdrawn its retirement notice and is pursuing the potential repowering of the plants at the Public Service Commission.  Environmental advocates argue the multi-year extension should be revisited after the Champlain Hudson Power Express (CHPE) hydropower transmission line enters service later this month, noting NYISO forecasts indicate the CHPE project could alleviate short-term reliability needs.  NYISO has stated that recurring, hyper-short interval reassessments are not a responsible basis for infrastructure planning.  NYISO plans to initiate its broader long-term Reliability Needs Assessment review later this year as stakeholders debate whether additional transmission, repowering, and other non-emitting solutions can replace peakers within regulatory timelines.
  • On 4/24, the New York State Energy Research and Development Authority (NYSERDA) launched its 10th annual renewable energy standard solicitation (RESRFP26-1) to accelerate clean energy deployment across New York by procuring Tier 1-eligible renewable energy certificates (RECs) from mature land-based projects - such as wind, hydroelectric, and solar.  The procurement aims to identify projects with a near-term path to commercial operation using two-step evaluations based on benchmark REC pricing, minimum threshold requirements, and additional price and non-price factors.  Project price submissions are due on 7/30, and initial awards are expected in September 2026.  The effort supports New York’s goal of emissions-free generation by 2040 alongside NYSERDA’s pipeline of 61 large-scale renewable projects projected to add more than 9 GW to the grid once operational.

ERCOT Energy Summary

CAISO, Desert Southwest and Pacific Northwest Energy Summary

  • Record heat is again forecast across portions of the interior West today where low to mid-90s will be common while some June like heat will be seen across inland California and the Desert Southwest. That stronger heat will back down over the next couple of days but is slated to remain above to much above normal in spots - mostly across California and the Desert Southwest. The three majors (San Francisco, Los Angeles, and San Diego) sit this one out however as coastal influences keep them temperate and thus loads in the CAISO at the unremarkable level. As we move through May, 90s will be common across the Desert Southwest while daytime highs should remain in the 80s for California and the interior West.
  • The natural gas complex is a balancing act of robust storage and shifting demand. Northern California is entering mid-May with PG&E storage nearing 170 Bcf, while the Pacific Northwest continues to manage a significant high-elevation snowpack melt that has curbed thermal generation needs. In the south, SoCalGas is grappling with ongoing transport capacity constraints while simultaneously managing a storage position approaching 98 Bcf, with Aliso Canyon being roughly 60% of that number. Beware High Operational Flow Orders (OFOs) as the system is on track to meet July fill levels by end of month.
  • Prices at the CAISO hubs and the broader West are exhibiting classic shoulder-season behavior characterized by deep price bifurcation. With temperatures in the LA Basin at the perfectly enjoyable setting, the grid struggles to absorb a flood of solar and wind generation meaning the day-ahead and real-time markets are seeing price settles below the $0 per MWh waterline often. Good for customers (and batteries), lousy for generators. The light load hours remain the primary revenue window for thermal gens and storage systems as prices rocket (relative term) into the $20s and $30s. The recent return of the PV2 nuke and Columbia Gen Station from an unplanned derate outage adds to the wealth of electrons on the western grid. The fundamental challenge for the Western Interconnect remains managing the aggressive evening ramps as solar fades to black, necessitating strategic gas gen deployment to maintain reliability.
  • We’re now closing in on the two week mark under CAISO’s Extended Day-Ahead Market (EDAM) which is a transformative shift in Western power grid coordination. Early results have revealed how regional transmission constraints and localized outages redefine value across the Western Interconnect. A primary takeaway from the initial couple of weeks is the emergence of the PacifiCorp-East territory (PACE) as a price island. Due to a heavy maintenance schedule impacting both generation units and critical tie lines, PACE has struggled to export its electrons. On the flip side, the PacifiCorp-West territory (PACW) has been unable to import and is forced to rely on thermal gens subject to Washington state’s expensive carbon allowance prices. This congestion has led to significant price decoupling; for instance, PACE peak prices recently plunged to -$17.42 MWh, while PACW has trended higher, signaling a "short" megawatt position marked by prices in the $20 - $30 range. Within the CAISO footprint, the EDAM experience thus far is producing a stark contrast between solar-saturated afternoons and supportive off-peak blocks. Midday day-ahead and real-time prices frequently dive into the negatives, the non-solar hours have shown surprising resilience clearing above $30s, big numbers in the early innings of this game. So far, only PacifiCorp has taken the leap and hitched its cart to the CAISO horse, but others are slated to join in the coming months/years according to the official timeline.

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