Natural gas and electricity prices fell for only the second time in eight weeks. For this seven day report period, the 12-month average price for natural gas at the well-head fell 5.5%, and the 12-month average price for peak power on the PJM fell 3%. Crude oil started the price descent as crude oil prices fell from $112/barrel to $99/barrel. Yesterday's drop in oil prices was the second largest one-day drop on record. All of the excitement in the oil complex spilled over into the natural gas and electricity sectors.
The analysts are not pointing to any one factor that created yesterday's sell off in the crude oil markets. The price drop seemed to catch the market by surprise. Here are some variables that may have placed some downward pressure on fuel prices. The "Restarting American Offshore Drilling Now Act" was passed in the U.S. House of Representatives yesterday. Plus, we continue to hear great things about the abundance of shale gas. News stories are touting that shale gas is now abundant in the Rockies. The supply picture for now looks robust and the demand picture for now looks sluggish.
However, we will see how robust supplies are as the economy improves and summer temperatures hit the country. Stay tuned. Summer is the next big wild card.