Over the last three weeks, energy prices pushed upward. However, the upward trend ended this week. For this report period, the 12 month average price for natural gas at the well-head fell 5%, and the 12 month average price for peak power on the PJM fell 2%. Many variables, including weather and tensions overseas, impact energy prices. The variable that seemed to impact prices this week came from the U.S. Energy Information Administration (EIA).
The EIA released their Shale Gas study this week. Shale gas is gas that comes from dry "horizontal drilling in conjunction with hydraulic fracturing." The study said that "the development of shale gas has become a game changer for the United States." 23% of the U.S. dry gas production now comes from Shale gas and that number is expected to climb. This report put a positive spin of U.S. gas supplies for now and thus placed some downward pressure on gas prices this past week.
But do not be lulled to sleep. The analysts are quick to note that the upcoming summer weather will influence the future direction of energy prices. Hurricanes in the Gulf of Mexico can place upward pressure on prices. Plus, increased cooling demand that comes with an unusually hot summer can place upward pressure on prices.
But for now, we are happy because natural gas and electric prices are still hovering near a seven year low, which saves you money.