For the second week in a row, the 12 month average price for natural gas on the NYMEX fell 1% and the 12 month average price for peak power on the PJM fell 1%. This small price decline was not a surprise as analysts continued to note that natural gas supplies were still robust and energy demand was still weak.
Domestic gas demand fell 1.9 % this week as compared to last week according to Bentek Energy. The influx of mild temperatures helped place downward pressure on energy demand. As mild temperatures hit the country, demand for energy temporarily dropped as many customers did not need to aggressively heat or cool their spaces.
While demand was low thanks to mild fall temps, supply was still high. Bentek Energy reported that this week's domestic dry gas production was 7.5% above last year's levels. This robust supply picture, which can be attributed to the recent shale gas discoveries, kept some downward pressure on energy prices.
However, do not let these mild temperatures and weak demand figures lull you to sleep. Old man winter is just around corner which means energy demand for heating will spike much higher than the levels we are now enjoying.