Weekly Focus: Positively Charged News

Week Beginning May 15, 2023

The House and Senate are slated to be in session together for four days before June 1, which the U.S. could default on its debt, and there is still no deal in place to ensure the U.S. doesn’t run out of money. President Biden says negotiations are moving along, but Treasury Secretary Janet Yellen says a default could cause “an economic catastrophe.”
Gasoline prices were down again last week to an average of $3.427 per gallon on the East Coast. Prices were down six cents per gallon from the previous week, and down $0.810 per gallon from 2022.
The average price for diesel was below $4 on the East Coast this week. Diesel was down $0.087 per gallon to bring the average price to $3.986 per gallon. Compared to last year, prices are down $1.921 per gallon.
Just like they have for the last 12 months, propane prices have held steady again this week. The average price for a gallon of propane in New York is $3.47.
Natural Gas
The NYMEX 12-month strip rose $0.10/dth on the week as the market continues to bounce up and down in the $2.90 to $3.10/dth range. Prices were supported last week mostly from news that the weekly Baker Hughes report showed a rather large drop in gas directed rigs by 16 down to 141. This reduction was seen as a potential catalyst for sustained higher prices later in the year. In the shorter term, however, current production remains strong at about 100 Bcf/day. 
The week’s storage injection came in at 78 Bcf, larger than projected, but still low enough to chip away at the current overhang, bringing those levels down to about 18% over the five-year average and 31% over last year’s levels.
When and if those higher prices materialize still largely depends on cooling demand levels this summer. May has not given the U.S. a lot of late spring heat and current June forecasts are showing just around average temperatures for June. If nothing changes, we’ll be waiting until July for the first sustained heat of the season.

Analysts are watching for any earlier than anticipated openings of three developing LNG facilities in the Gulf Coast: Plaquemines LNG in Louisiana, Golden Pass LNG in Texas, and Cheniere’s expansion in Texas. Comments and filings show these plants may be online months before current mid-late 2024 projections.  
Looking ahead, current forecasts continue to show temperate temperatures in the Northeast and Midwest through the end of the month, potentially paving the way for another week or range-bound prices.
Power forwards were up $1/MWh last week for the 12-month strip. NYISO ROS UCAP was up a little for the next few capability periods. Overall, the New York City capacity market continues to lack liquidity. PJM Class 1 and 2 RECs were each up a few percent.
Last week, New York State passed its budget, and in it is a law that allows the New York Power Authority (NEPA) power to build renewable energy projects to help the state reach it’s 2030 climate goals. The projects include community solar farms, offshore wind energy, and standalone energy storage.