| Week Beginning June 5, 2023 Like clockwork, a named tropical storm in the Gulf of Mexico started off hurricane season, which officially began on June 1. Tropical Storm Arlene sustained winds of 40 mph before it fell apart as it moved towards the Atlantic Ocean. Scientists predict there could be 12 to 17 named storms this year. Hurricane season goes through November 30. |
| Oil prices rose on Monday after Saudi Arabia announced it would cut oil production by another 1 million barrels per day starting in July. OPEC countries had agreed previously to two production cuts, one in October 2022 and one in April 2023, in which they agreed to cut more than 3 million barrels per day total by July 2023. Gasoline prices were up almost five cents per gallon on the East Coast last week, making the average cost for a gallon of unleaded gasoline $3.427. Compared to 2022, prices are down $1.120 per gallon. Diesel prices fell slightly again last week by nearly three cents, making the average cost for a gallon of diesel on the East Coast to $3.886. Looking back to 2022, diesel prices are down nearly $2 per gallon. Propane rose about one cent last week to an average of $3.22 per gallon in New York State. Propane prices have made little to no movement much of the year. |
| The NYMEX 12-month strip dropped $0.14/dth on the week on a rerun of the themes from the week before – strong production, big storage injection, weak demand, prices down. On the supply side, storage surpluses continue to widen after an injection of 110 Bcf. Levels now sit at about 17% above the five-year average and 30% above the one-year averages. Concerns about Canadian supply also continue to wane amid a rebound in production in Western provinces impacted by late spring wildfires. On the demand side, summer cooling has yet to really appear in the Northeast and Midwest. June’s weather has started mild, and forecasts for the rest of the month are not showing any signs of a heat wave. New York City currently has no days forecasted to hit 90 degrees for the rest of June and early July forecasts show no hotter than average temperatures for all but smaller pockets of the country. Looking ahead, the market will continue to wait for clarity on the arrival of cooling demand and watch for any signs of more sustained production reductions, just like it has in recent weeks. |
| Power forwards were down $2/MWh last week for the 12-month strip. NYISO UCAP jumped up for the next few capability periods in all zones. Overall, the New York City capacity market continues to lack liquidity. PJM Class 1 and 2 RECs were each up a few percent. |
| The International Energy Agency says investment in solar is expected to attract over $1 billion globally each day in 2023. The IEA says global investment in energy will near $3 trillion in 2023, with $1.7 trillion of that set for clean energy. |