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Weekly Energy Industry Summary

Commodity Fundamentals

Week of June 1, 2026

By the Numbers:
 
  • Prompt month natural gas settled at $3.18/MMbtu, down $.11 on Monday, June 1.
  • Prompt month natural gas settled at $3.02/MMbtu, on Monday, May 18.
  • Prompt month crude oil (WTI) settled at $92.16/bbl., up $4.80 on Monday, June 1.
  • Prompt month crude oil (WTI) settled at $108.66/bbl., on Monday, May 18.

Natural Gas Fundamentals - Neutral

  • After a brief but strong heat wave in the East over the Memorial Day week period, temperatures backed off considerably and were "cooler-than-normal" throughout the northern tier and much of the Eastern half of the country.  The pattern warms up in the 11-15 day period with seasonal mid 80s and some 90s in the East. 
  • Natural gas production, year-to-date averaged 108.7 Bcf per day, up 4 Bcf per day over the same period last year.
  • Natural gas demand for power generation, year-to-date averaged 32.3 Bcf per day versus 31 Bcf per day for the same period last year.
  • LNG feedgas deliveries averaged 19.6 Bcf per day versus 15.8 Bcf per day for the same period last year.
  • Exports to Mexico averaged 6.5 Bcf per day year-to-date, unchanged from the same period last year.
  • The supply-demand balance is tightening. Prices have found a near term bottom in the month of April and summer weather is supportive of current pricing action.

Crude Oil - Bullish

  • Crude oil (WTI), moved up $4.80/bbl., yesterday settling at $92.16/bbl., after ongoing negotiations with Iran reportedly stalled.
  • President Trump said yesterday that a deal is potentially going to be had this week, however, the confidence level remains low as Iran's militant IRGC is in charge of negotiations and the Strait of Hormuz remains closed.
  • ExxonMobil's Senior Vice President Neil Chapman warned that oil prices are poised for a major move to the upside in the coming weeks as global storage inventory levels are nearing a critical point.
  • Weak demand from the world's largest crude oil importer (China) is partially checking global oil prices. According to Kpler, seaborne crude imports to China in May fell to a decade low of 6.5 million bbls., per day, down 1.6 million barrels per day from April.  China has large inventories of crude oil and is drawing from them while restricting exports of refined petroleum.
  • Bullish for longer and until further notice.

Economy - Neutral

  • Core inflation hit an annual rate of 3.2% in April, according the U.S. Federal Reserve.
  • Consumer sentiment declined in May as the index fell to 44.8, down from 49.8 in April.
  • U.S. construction spending ticked up in April rising 0.4% to an annualized pace of $2.17 trillion.
  • U.S. factory activity expanded in May with the ISM purchasing managers index at 54, its highest level in four years.
  • U.S. GDP growth for the first quarter was revised downward to 1.6% while corporate profits showed their largest year-over-year increase since 2021.
  • Traders now see a potential rate hike by the Fed as inflation is on the move to the upside.

Weather - Neutral/Bullish

  • A major reversal from late May heat is coming to an end as more seasonal June temperatures are on the way.
  • The pattern is seasonal and variable across much of the Eastern two thirds of the country in the 11-15 day period.
  • Summer air conditioning loads and demand for gas-fired electric power are set to increase, the primary factor in rebalancing natural gas supply and demand.

 

 

Weekly Natural Gas Report

  • Inventories of natural gas in underground storage for the week ending May 22 are 2,483 Bcf; an injection of 92 Bcf was reported for the week ending May 22. Stocks were 21 Bcf higher than this time last year and 144 Bcf above the five-year-average.
Values reflect week ending May 29, 2026
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Prices reflect week ending May 29, 2026

Weekly Power Report:

Mid-Atlantic Electric Summary

  • The Mid-Atlantic Region’s forward power prices were slightly higher over the past week, supported by a slight increase in expected cooling demand along with lower natural gas production levels.  The continued closure of the Strait of Hormuz is also supportive of gas and power prices as it will incentivize increased feedgas flows to US LNG plants.  High pressure from Canada will be in charge of the eastern United States for the beginning of this week, with mild temperatures and low humidity levels. Warmth expanding eastward from the upper Midwest looks like it is coming in a bit stronger than forecasted from last week. This will bring upper 80s and lower 90s into the Mid-Atlantic region by the end of the week and over the weekend. It looks like a short-lived event as ridging is shown backing down in the 11-15 day period.  The forward electricity prices for the 2027-2030 strips were only 1% higher than last week and relatively unchanged over the past month.  The preliminary, final day-ahead settlement price for May in West Hub is $45.67/MWh which is -13% lower than April’s final settlement price.
  • Pennsylvania State Senator Yaw Letter Regarding PJM’s Powering Reliability Through Market Design Paper - On 5/26, Pennsylvania State Senator Gene Yaw sent a letter to the PJM Board of Managers praising PJM’s recent white paper on grid reliability challenges but arguing that the current regional energy market unfairly penalizes states like Pennsylvania that maintain dispatchable power generation and natural gas infrastructure.  The letter contended that states such as Virginia and Maryland have adopted aggressive climate policies - including renewable mandates and participation in the Regional Greenhouse Gas Initiative (RGGI) - while simultaneously driving massive electricity demand through data centers and electrification initiatives.  The letter also criticized PJM’s region-wide capacity price collar and called for a “hybrid” market design that combines a base price cap with localized constraint surcharges in high-demand or policy-driven shortage zones.  The letter supports PJM’s proposed “Path B: Differential Reliability” framework, advocating for geographically differentiated reliability standards, locational pricing mechanisms, and stronger cost-causation principles.  Finally, Senator Yaw called on Pennsylvania’s Attorney General and consumer advocate to become more active in PJM and FERC proceedings to defend Pennsylvania consumers and energy producers.  PJM has scheduled a series of workshops focused on holistic market evaluation between June and August 2026.

Great Lakes Electric Summary

  • The Great Lakes Region’s forward power prices were slightly higher over the past week, supported by a slight increase in expected cooling demand along with lower natural gas production levels.  The continued closure of the Strait of Hormuz is also supportive of gas and power prices as it will incentivize increased feedgas flows to US LNG plants.  High pressure from Canada will be in charge of the eastern United States over the next few days with mild temperatures and low humidity levels.  Warmth expanding eastward from the upper Midwest looks like it is coming in a bit stronger than forecasted from last week. This will bring upper 80s and lower 90s into the Mid-Atlantic region by the end of the week and over the weekend. It looks like a short-lived event as ridging is shown backing down in the 11-15 day period.  The forward electricity prices for the 2027-2030 strips were only 2% higher than last week and relatively unchanged over the past month.  The preliminary, final day-ahead settlement price for May in COMED is $28.72/MWh which is 18% higher than April’s final settlement price, while in AdHub that price is $39.66/MWh or -13% lower than the previous month.  In Michigan, the preliminary final settlement price for May is $34.06/MWh or -16% lower than the April average, while in Ameren that average final price for the month is $29.88/MWh or is unchanged compared to April’s final settlement price.
  • Ohio Governor DeWine Announces Pause on Data Center Tax Exemption - Governor Mike DeWine has directed the chair of the Ohio Tax Credit Authority to pause consideration of any new data center tax exemption requests while the General Assembly's Joint Data Center Committee studies the growth of data centers in Ohio. The Ohio Tax Credit Authority will stop accepting new data center tax exemption proposals after its currently scheduled meeting on 6/1, where an existing data center tax exemption request will be considered.  This action only suspends the ability for data centers to request tax exemptions in Ohio and is not a data center ban.  Ohio also convened the inaugural hearing of the newly formed Ohio Select Committee on data centers, which was the first of five planned hearings.  This bicameral committee consists of eight lawmakers, six Republicans and two Democrats, and is co-chaired by Senator Chavez (Chair of the Senate Energy Committee) and Representative Holmes (Chair of the House Energy Committee).  The committee is tasked with investigating the rapid expansion of data centers across the state and its impact on infrastructure, energy grids, consumer costs and taxpayers.

Northeast Energy Summary

  • On May 28, the Massachusetts Department of Energy Resources (DOER) issued emergency regulations that reduce the obligations under the Clean Peak Energy Standard (CPS) for the years 2026-2030.  The CPS incentivizes clean peak resources such as qualified renewable energy resources, battery storage, and demand response programs to produce clean energy or reduce demand during peak hours by allowing such resources to generate credits, called Clean Peak Energy Credits (CPECs) during their contribution to the peak.  Load serving entities (LSEs) are required to purchase these CPECs to offset a percentage of their customer load, similar to the Renewable Portfolio Standard (RPS) programs in Massachusetts and other states.  To address ongoing affordability concerns, DOER reduced the Load Serving Entity compliance obligations by 3% in 2026 and then by an additional 1% in years 2027-2030.  This reduces the number of CPECs that LSEs are required to purchase between 2026 and 2030, reducing the cost of compliance with the program and allowing the LSEs to pass those savings to customers.  The emergency regulations are effective immediately and will last 90 days.  However, DOER has already scheduled a public hearing and provided opportunity for comments, which would allow them to make the new rules permanent. Comments will be accepted until the public hearing scheduled for July 6.
  • 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

  • Meteorological summer began yesterday under a dual reality of long-term warming trends and near-term volatility across the West. Climatologically, June is the hottest month of the year in parts of the Desert Southwest, with temperatures increasing steadily before the monsoons roll in. Recent data highlights a clear warming trajectory, as eight of the past ten Junes exceeded the 30-year normal, including four of the top five hottest since 1950. However, that’s not what we’re looking at yet. The first week of June 2026 brings a brief warmup to Southern California before temperatures retreat to the 70s again for the weekend. This mild coastal pattern looks like it will keep regional cooling demand modest, while abundant sunshine and wind continue to swamp the power grid. Widespread above-normal temps are expected to return to the interior West by mid-month, but coastal California will likely remain closer to normal, delaying any sustained weather-driven load.
  • This combination of mild coastal weather and surging renewable generation is putting unprecedented pressure on California’s natural gas market. With thermal generation at an all-time low for the CAISO, gas entities are facing a critical demand deficit. Reduced power burn consumption has forced massive volumes of gas into storage. Both PG&E and SoCalGas are rapidly approaching their max injection levels from 2025, with PG&E hitting the 179 Bcf mark and SoCalGas nearing 100 Bcf. This creates a severe operational bottleneck ahead of winter, exacerbated by limited injection rates at key facilities like Aliso Canyon. Shippers are struggling to find market demand, a problem intensified by an impending late-season Pacific Northwest hydro push from late season snowmelt, which will further displace gas-fired gens through July. This is shaping up to be the Summer of the High Operational Flow Order (OFO).
  • Dispatchers at the CAISO have been dealing with a flood of renewable resources, particularly at the SP15 hub. High wind deliverability this spring along with the usual midday solar wave, and more recently the influx of SunZia sourced wind, have led to an escalation of renewable curtailments. With the grid so heavily saturated that SP15 power prices frequently plunge into negative territory, any thermal gens remaining online during these hours operate strictly for reliability, supporting ancillary services or the integrated day-ahead regulation markets. Prices in late May were often seen in the negative teens per MWh, trying to provide a price signal to drive self-selected curtailments. Some mild heat this week may provide a brief demand opportunity which could bring SP15’s prices into the single digits during peak solar hours, but the temperatures look set to dissipate by the weekend putting dispatchers back into curtailment-land.          
  • In an uncharacteristic turn, California has become the latest state to retreat on climate goals amid affordability concerns as regulators revamped its carbon market to ease costs. Helping the oil industry. And voters. Just in time for today’s primary elections. The California Air Resources Board (CARB) voted last week to give up as much as $4B worth of free allowances to oil refiners and other industrial polluters to help them comply with greenhouse gas (GHG) limits imposed by the State’s carbon market, now called Cap-and-Invest. The plan removes hundreds of millions of emissions allowances but creates a new incentive pool and more free permits for industry, aiming to keep refineries and manufacturing from leaving. Critics of the plan said the change may lead to higher emissions and lower prices on the State’s carbon market, which is a key source of funding to keep us on the path to carbon neutrality by 2045. Free allowances will likely dig deep into the revenue stream that funds a variety of programs focused on drinking water, affordable housing, and air protection. But don’t let your concern for the stability of the decades old high-speed train keep you awake; under legislation enacted last year, $1B of yearly carbon market revenues must be reserved for high-speed rail project.

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