|Week Beginning May 1, 2023JPMorgan Chase is in talks to buy failing bank First Republic for over $10 billion. JP Morgan will acquire $173 billion of loans and $30 billion of securities from First Republic. JPMorgan is the largest bank in the United States.|
First Republic is the third bank to fold in the last seven weeks. In the previous two years, there were zero.
|The International Energy Agency (IEA) is coming under fire from OPEC and OPEC+ countries who say the IEA’s idea to discourage oil investments could be counterproductive. OPEC and OPEC+ claim they are focusing on “market fundamentals” and not targeting the price of oil.|
“The IEA knows very well that there are a confluence of factors that impact markets. The knock-on effects of COVID-19, monetary policies, stock movements, algorithm trading, commodity trading advisors and SPR releases (coordinated or uncoordinated), geopolitics, to name a few,” OPEC Secretary General Haitham al-Ghais said.
Al-Ghais also said that blaming oil prices for inflation was “Erroneous and technically incorrect as there are many other factors causing inflation.”
Speaking of oil prices, gasoline prices were up about three cents per gallon this week on the East Coast, coming in at $3.543 per gallon.
Diesel prices on the East Coast were down about four cents per gallon this week to $4.151 per gallon on average. Compared to a year ago, diesel is down an average of $1.058 per gallon.
Propane prices were up about 1% this week to $3.47 per gallon. That is only four cents more per gallon than a week ago. Compared to a year ago, propane prices are down 20 cents per gallon.
|The NYMEX 12-month strip was basically unchanged on the week, dropping less than $0.01/dth. With the May contract rolling off, the new current 12-month strip covers the months of June 2023 – May 2024. |
The market continues to be in flux as we are just starting to pass heating season, but still a few weeks out from prime summer cooling season.
On the supply side, storage is doing little to prop up prices as the injection number last week came in at a strong 79 Bcf, increasing the surplus to 22% over the five-year average and 35% over the one-year average for this week in April. As noted in previous week’s notes, comments from suppliers continue to come in that may point to a tightening of the market later in the year. Range Resources, a large producer in the Marcellus area, stated on its earnings call that it planned to drop 2/3rds of its rigs before the end of the year and keep production flat for the same period. Southwestern Energy, another large Marcellus producer, made similar comments on its plans during an investor call last week.
On the demand side, the Northeast and Midwest are seeing a cool end to April and start to May, but prices haven’t reacted strongly to this pattern as temperatures in the Northeast are looking to be closer to normal by the second week in May. New York City is forecasted to see highs back up near 70 degrees starting May 8th.
With current forecasts showing a rebound back to more normal temperatures, this could set the stage for another week without major price moves up or down.
|Power forwards were down $1/MWh last week for the 12-month strip. NYISO ROS UCAP jumped up for the next few capability periods. Overall, the NYC Capacity market continues to lack liquidity. PJM Class 1 and 2 RECs were each up a few percent.|