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NOTE: We will not be sending the Energy Market Update the week of May 25 due to the holiday. We will return the week of June 1.

Weekly sustainability insights can now be found by following this link: Sustainability Corner

Weekly Energy Industry Summary

Commodity Fundamentals

Week of May 18, 2026

By the Numbers:
 
  • Prompt month natural gas settled at $3.02/MMbtu, up $.06 on Monday, May 18.
  • One week ago, prompt month natural gas settled at $2.91.
  • Two weeks ago, prompt month natural gas settled at $2.87 (May 4).
  • Prompt month crude oil (WTI) settled at $108.66/bbl., on Monday, May 18, up $3.24.
  • One week ago, prompt month crude oil (WTI) settled at $97.49/bbl.

Natural Gas Fundamentals - Neutral

  • The heat in the East and Midwest gives way to a strong cold front that brings storminess and rain.  New York City will move from a high this afternoon of 94 degrees today and 92 degrees tomorrow, to a high of 67 on Thursday.  Cooler temperatures will persist in the 6-10 day period to finish the month of May.
  • Natural gas production is tapering modestly with month-to-date output at 108.4 Bcf per day, down about 1.5 Bcf per day from March.
  • Scheduled maintenance at Sabine Pass and Freeport LNG have dipped feedgas volumes by 1.6 Bcf/d.
  • Power generation demand for gas averaged 31.2 Bcf/d, month-to-date, versus 30.4 Bcf/d for the same period last year.

Crude Oil - Bullish

  • President Trump said yesterday that he held off on resuming kinetic military action in Iran at the request of Gulf-State allies, but has said that there is a short fuse on resumption of force.
  • Crude (prompt-month WTI) settled at $108.66/bbl., up $3.24 on Monday, May 18.
  • The Administration temporarily lifted sanctions on Russian crude oil for 30 days.
  • As of this writing, WTI was trading at $108.90/bbl., up $.24.
  • China is reportedly urging Iran to reopen the Strait of Hormuz.
  • Bullish for longer and until further notice.

Economy - Neutral

  • Traders now see a potential rate hike by the Fed as inflation is on the move to the upside.
  • Consumer price inflation is projected to hit 6% for the second quarter, according to a survey of Professional Forecasters, CNBC reports.
  • Treasury yields (30 year) surged to 5.1%, a one year high.
  • Kevin Warsh was confirmed last week as the new Fed Chairman.
  • Employment has been steady and above expectations over the past two months.
  • The NAHB Housing Market Index increased to 37 in May from 34 in April, but major headwinds persist.

Weather - Neutral

  • The heat in the East and Midwest reverses abruptly over the next 48 hours.
  • Much cooler air will prevail throughout much of the eastern half of the nation in the 6-10 day period.
  • Rain and storminess will be a daily occurrence over the next week, brining much needed moisture to parts of the Southeast.

 

 

Weekly Natural Gas Report

  • Inventories of natural gas in underground storage for the week ending May 8 are 2,290 Bcf; an injection of 85 Bcf was reported for the week ending May 8. Stocks were 51 Bcf higher than this time last year and 140 Bcf above the five-year-average.
Values reflect week ending May 15, 2026
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Prices reflect week ending May 15, 2026

Weekly Power Report:

Mid-Atlantic Electric Summary

  • The Mid-Atlantic Region’s forward power prices were higher on the week as expectations for warmer than normal temperatures over the next two weeks along with declining natural gas production has helped elevate gas futures to a seven-week high on Monday.  The focus of the current weather pattern remains on fine-tuning the early-week heat across the East Coast.  An enhanced ridge has set up over the Mid-Atlantic, bringing highs in the middle 90s over the next couple of days before a cold front moves into the region, causing temperatures to drop below normal later this week.  The forward electricity prices for the 2027-2030 strips were 2% higher than last week and 5% higher than a month ago.  The month-to-date, day-ahead settlement price average for May thus far at West Hub is $53.09/MWh which is 2% higher than April’s final settlement price average so far.
  • PJM is expected to maintain reliability under typical summer conditions with sufficient resources in place this summer 2026. Declining reserve margins, rising peak demand, and increased reliance on demand response, however, point to a more fragile system under stress.  PJM enters summer 2026 with 180 GW of capacity against expected peak demand of 156 GW, supported by 7.8 GW of demand response resources.  Under more extreme conditions, peak load could reach 169 GW, approaching historical highs that would materially compress reserve margins.  Reserve margins have trended downward from >20% historically to the mid to low-teens currently, as load growth-driven in part by data centers—outpaces new generation additions.  PJM called demand response six times last summer, highlighting a structural shift toward greater reliance on operational interventions to maintain grid reliability.

Great Lakes Electric Summary

  • The Great Lakes Region’s forward power prices were higher on the week as expectations for warmer than normal temperatures over the next two weeks along with declining natural gas production helped gas futures reach a seven-week high on Monday.  The focus of the current weather pattern remains on fine-tuning the early-week heat across the East Coast.  An enhanced ridge has set up over the Mid-Atlantic, bringing highs in the middle 90s over the next couple of days before a cold-front moves into the region, causing temperatures to drop below normal later this week.  The pattern resets next week, with ridging and warmth across the northern tier of the United States, while the southern tier remains closer to normal.  The forward electricity prices for the 2027-2030 strips were 2% higher than last week and 4% higher than a month ago.  The month-to-date, day-ahead settlement price average for May in COMED is $28.36/MWh, which is 16% higher than April’s final settlement price average, while in AdHub that average price thus far is $43.79/MWh which is -4% lower than the previous month.  In Michigan, the month-to-date average price for May is $34.44/MWh or -15% lower than the April average, while in Ameren that average price thus far is $28.91/MWh or -3% lower than the April final average price.
  • MISO enters summer 2026 with sufficient capacity to meet peak demand, supported by new resource additions and operational enhancements.  Reserve margins, however, remain tight and the RTO has become increasingly dependent on solar output, imports, and precise system operations, highlighting a continued risk to reliability.  MISO expects to meet summer peak demand with 142.6 GW of available capacity versus 125 GW of forecast load, supported by new generation and increased imports.  Capacity additions of 4-5 GW over the past year were driven primarily by solar, along with incremental natural gas and battery storage resources, improving near-term supply adequacy.  Despite higher capacity levels, reserve margins remain tighter than historical levels due to continued load growth, including large industrial and data center demand.  System enhancements, including updated reserve requirements, improved solar forecasting, and expanded use of artificial intelligence, are being deployed to manage variability and identify risks earlier.  System reliability is increasingly sensitive to intra-day dynamics, particularly the evening transition as solar output declines.

Northeast Energy Summary

  • A confluence of factors have kept New England forward energy marks supportive in recent weeks starting with the persistent energy supply chain impacts of the War in Iran. The Strait of Hormuz continues to be, for all intents and purposes, closed bottling up 20% of the world's oil and liquified natural gas (LNG). The Dutch TTF prompt month contract, which has been a fair proxy for global natural gas, has steadily crept up from $13/MMBtu back in mid-April to now approaching $17/MMBtu as cargo demand for the fuel inches higher with both Asia and Europe having needs to fill storage inventories ahead of winter. The YTD high for the contract reached $22/MMBtu in the immediate aftermath of the initial military strikes in the Persian Gulf. New England energy forward prices and the Dutch TTF contract have moved up in tandem as a positive correlation between Northeast markets and overseas energy exists because during the natural gas demand heavy winter months, LNG cargoes into Boston often time supplement sometimes limited dry pipeline natural gas (on the coldest days). To incentivize those cargoes to the region the prices must match or surpass global destination prices. The Northeast energy markets continue to trade with tremendous volatility because not only the turmoil overseas but also large swings in Regional Greenhouse Gas Initiative carbon allowances - after trading around $25/short ton for much of the past year, prices have doubled in a few short weeks. Last week we saw prices dip back down into the $30s but a new wave of buying has prices back in the mid-$40s which has pressured forward energy prices in New England. Additionally, widespread heat across most of the east in the coming days has the market on the lookout for increased cooling demand and gas burn. Henry Hub natural gas pricing in the US has moved up slightly as the warmth starts to moving in which could create additional upward price support in the region. Price moves in both Henry Hub and global markets could vary greatly as new developments in both markets are revealed.
  • The ISO New England intends to lower the Pay-for-Performance (PfP) payment rate from $9,337/MWh to $3,500/MWh.  The ISO claims this change is an attempt to limit risks and costs while still incentivizing investment and performance and providing some degree of stability and transparency amid the various capacity market reforms underway.  PfP was a market mechanism put into place to incent investments to improve performance during stressed system conditions.  The ISO now seeks to lower the rate (i.e., limit the incentives to perform) in part to lower costs and in part for fear that the current rate may cause resources that cannot perform, and/or cannot tolerate the risk of non-performance, to retire. From a customer/end-user basis, this could lower capacity costs (all other things being equal) as the lower penalty rate may ease the financial burden for non-performing resources and therefore allowing them to require a lower revenue rate in the form of capacity auction rate offers.
  • The Champlain Hudson Power Express (CHPE) transmission line completed commissioning and entered commercial operation on May 13, ahead of schedule. It is now fully operational and supplying power into the NYISO market, with full contract deliveries to New York beginning June 1. The 1,250 MW merchant transmission line, spanning 339 miles, will deliver approximately 10.4 TWh/year of hydropower from Canada to New York City under a 25-year contract with the New York State Energy Research and Development Authority (NYSERDA). The line can supply roughly 20% of New York City's power demand at full capacity.

ERCOT Energy Summary

CAISO, Desert Southwest and Pacific Northwest Energy Summary

  • Cooler adjustments were made to the forecast indicating a chilly start to the week is on tap for the interior West and Rockies while cooler temperatures will also be seen across the Desert Southwest cities. A little heat in the 80s and even 90s will keep the smaller population centers of the Central Valley on the AC during the day while the larger coastal population centers just open the windows. The pattern will then begin to warm towards the end of the week with mid to upper 90s hitting the Desert Southwest while temperatures remain on the milder side farther north across the Pacific Northwest, which means the tie lines into the CAISO will be full of electrons seeking a home. A warmer than normal lean is shown in the models heading towards the end of the month and into the first week of June, mostly across the interior West, while California and coastal population centers remain temperate. This type of weather pattern – mild temperatures and a ton of sunshine plus a jet stream that has delivered a boatload of wind across the West region over the last couple of months – has resulted in price action that has been highly favorable to the end user. Day-ahead and real-time settlements have consistently seen prices clear below the $0 MWh waterline during peak hours. Prices at the day-ahead for flow today in SP15 cleared at $3 MWh for the peak period, the first time that period cleared at a positive value since last Thursday.
  • Even natural gas buyers are getting close to this action, PG&E’s city gate prices have been clearing at ~$1.50 this month and SoCal’s have been holding in the low $2.00s MMBtu. At the end of last week, the needle on SoCalGas’s storage tank was pointed at 98.5 Bcf while PG&E’s was at 172.8 Bcf. What makes this notable is this is essentially two months before the two systems hit tank tops for storage before reaching the prime summer cooling demand season and the need to draw down the stocks as power gens crank up. SoCalGas has about 7 Bcf of space left before it hits its high-water mark. PG&E is already there with its 172ish number (this doesn’t mean 100% full however, their storage pre-winter climbed to 186 Bcf in Nov 2025 … but its close). This setup leaves prices exposed to fall even further if the summer months do not deliver power demand needs that require thermal gen participation.
  • NV Energy to Lake Tahoe residents: go jump in the lake! Fortune broke the news last week that NV Energy, the powerhouse utility that lights the Vegas Strip and has supplied most of Lake Tahoe’s electricity for decades, informed Liberty Utilities that it will stop delivering power to the region after May 2027. The reason: NV Energy needs the capacity for AI data centers being built by many of the familiar tech giants in the Tahoe-Reno Industrial Center east of Reno. Liberty Utilities buys about 75% of its power from NV Energy. This means that the roughly 49,000 customers that Liberty serves on the California side of the lake have less than a year to find a replacement.

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