Canada Clears Path for Oil Pipeline

Canadian Prime Minister Mark Carney and Alberta Premier Danielle Smith signed a deal on industrial carbon pricing Friday that is meant to pave the way for construction of a 1-million-barrel-per-day crude oil pipeline to British Columbia's northwest coast to start by September 2027 , according to Reuters. The deal will increase the effective carbon credit cost in Alberta's industrial carbon market to C$130 ($94.59) a metric ton by 2040 from $95 , a measure designed to provide oil companies with financial incentives to cut emissions while clearing the path for expanded export capacity to Asian markets.

The proposed oil pipeline would transport more than one million barrels of oil per day through a strategic port to Asian markets , according to Victoria News. The agreement allows Alberta to avoid a significant increase to the federally mandated industrial carbon tax to save Alberta's industry partners about $250 billion over the next two decades to 2050 . The price of carbon will remain at $95 per tonne for the remainder of 2026, and will increase to $100 per tonne starting in 2027 until 2030 , before gradually rising to the C$130 target by 2040.

Enbridge Inc. "definitely would consider" backing a new oil pipeline to Canada's west coast, its chief executive officer said, giving an early vote of confidence hours after Prime Minister Mark Carney signed an energy deal with Alberta Premier Danielle Smith , Bloomberg reported. The Canada-Alberta pact opens the way to start construction on a new pipeline capable of carrying 1 million barrels a day of Canadian oil to the coast of British Columbia.

Can the U.S. Refill Its Oil Reserves?

The Trump administration plans to add 1.2 barrels to the SPR for every barrel it takes now, with Energy Secretary Chris Wright saying "We'll leave it fuller than when we started" , according to OilPrice.com. The Strategic Petroleum Reserve stood at 392 million barrels as of May 1, following the release of 172 million barrels as part of a coordinated 400-million-barrel global emergency drawdown managed through the International Energy Agency , the Foreign Policy Journal reported.

The administration's pledge comes as the reserve sits well below its roughly 714 million barrel capacity. Under DOE's exchange authority, participating companies will return the borrowed 92.5-million-barrels of crude with additional premium barrels, ensuring the SPR grows beyond current levels while delivering immediate supply to refiners and global oil markets , according to the Department of Energy.

Crude oil rigs in the United States increased to 415 in May 15 from 410 in the previous week , according to Trading Economics citing Baker Hughes data. The RSS article from OilPrice.com noted that the number of active oil rigs rose by 5 during the latest reporting period, bringing the total to 415, which is 50 below this same time last year.

Will Summer Heat Drive Gas Prices Higher?

Natural gas futures are testing key resistance levels as traders price in summer cooling demand. Despite rising 8.2 percent since the rollover to the June 2026 contract on April 29, the Henry Hub prompt month remains under $3 as of May 13 and is nearly 62 percent lower than the near-term high set on January 28 , according to the American Gas Association. According to market data, Henry Hub natural gas traded at $3.25/MMBtu on Friday, down 2.4% from the prior session.

Natural gas-fired power burn is on track for a record 40.3 Bcf/d this summer as lower prices accelerate coal-to-gas switching, and data center load lifts baseload demand, the Natural Gas Supply Association (NGSA) said in its 2026 Summer Outlook , Natural Gas Intel reported. L48 production is expected to steadily increase throughout the forecast period, averaging 118.9 Bcf/d in 2026 and 124.0 Bcf/d in 2027 , according to the EIA's Short-Term Energy Outlook.

Futures prices at Europe's key trading hub, the Dutch Title Transfer Facility (TTF), and Asia's benchmark, the Japan Korea Marker (JKM), have risen roughly 48.1 percent and 82.8 percent, respectively, since the conflict in Iran began at the end of February 2026, while Henry Hub prices declined 9.1 percent over the same period , the American Gas Association reported.

British Gas Faces Historic Penalty

Ofgem closed its investigation into British Gas on its treatment of customers who had a prepayment meter (PPM) installed without their permission, with the regulator's investigation concluding that British Gas failed to meet the standards required of an energy supplier when installing prepayment meters, and that it breached licence conditions specifically designed to protect customers in vulnerable situations . British Gas has agreed to pay a £20 million payment into Ofgem's Voluntary Redress Fund , according to the UK energy regulator.

The Financial Times reported that Ofgem found the utility breached licence conditions designed to protect vulnerable customers. Under the settlement, British Gas must pay a £20 million penalty into Ofgem's voluntary redress fund, write off energy debts of up to £70 million, and continue to honour the remaining portion of a £22.4 million voluntary assistance package it launched in the immediate aftermath of the scandal , according to Hounslow Herald.

Ofgem found that some of the failings underlying these breaches had been brought to the attention of British Gas' management, through an external review in 2018 and an internal audit in 2021, which flagged certain organisational performance deficiencies, and whilst remedial actions were undertaken in response to those findings, Ofgem concluded these actions were inadequate .

What Changed This Week

Canada took a major step toward diversifying its energy exports away from the United States with a carbon pricing compromise that could see a million-barrel-per-day pipeline begin construction next year. Meanwhile, the U.S. oil patch showed signs of renewed drilling activity with a five-rig increase in active oil rigs, even as the Strategic Petroleum Reserve remains roughly 45% below capacity following emergency releases. Natural gas markets are navigating a seasonal transition, with domestic prices remaining subdued below $3/MMBtu while global benchmarks surge on geopolitical tensions, and record summer power demand from data centers is expected to test the supply-demand balance in coming months.

What to Watch

The Canadian federal government has committed to reviewing Alberta's pipeline submission to the Major Projects Office by July 1, which will determine whether the September 2027 construction timeline holds. Commissioning activities have begun on Train 6 at Corpus Christi Stage 3, which is expected to add another 0.2 Bcf/d of nominal export capacity in summer 2026 , according to the EIA. The EIA assumes that the Strait of Hormuz remains effectively closed until late May, with shipping traffic beginning to pick up in June , which will be critical for global oil supply flows. Weekly natural gas storage reports through May and June will signal whether summer heat is tightening the market or if robust production continues to absorb demand growth.