In last Friday's newsletter, we reported that natural gas and electricity prices ended the week flat. However, energy prices fell this week. In fact, this is the fourth week out of five weeks that energy prices have fallen.
For this seven day report period, the 12 month average price for natural gas on the NYMEX fell 1.7%, and the 12 month average price for peak power on the PJM fell 2.2%.
We continue to experience some downward pressure on natural gas and electricity prices because supplies are high and demand is low. From a supply standpoint, we will start winter with lots of natural gas in storage. Storage levels are now 1% above the five year average. The shale gas discoveries have helped create this robust supply picture. Plus, the tropical weather cooperated this year in the Gulf of Mexico as very few storms affected the supply chain.
From a demand side, energy needs for heating and cooling are minimal at this time of year. Additionally the slow economic recovery has translated into low demand for natural gas and electricity .
Since supply is high and demand is low, prices are low. If you have not locked next winter's prices, this is a great time to discuss your renewal strategy with your WGES account manager. Gas prices are now near the eight year low, and electricity prices are near the seven year low.