Energy prices fell again this week. This is the fifth week out of six weeks that energy prices have fallen. For this seven day report period, the 12 month average price for natural gas on the NYMEX fell 2.7%, and the 12 month average price for peak power on the PJM fell 1%.
During the last month, there has been little demand for natural gas because there has been minimal demand for space heating or cooling. Additionally, the manufacturing demand for natural gas has not been extremely robust. When you couple this slack demand component with the rising production numbers coming from the shale gas discoveries, you create a temporary gas glut. This unused gas has been pumped into storage. In fact, the natural gas storage injection reported this week was a whopping 112 Bcf. This was the first triple digit injection ever recorded in October.
However, do not be lulled to sleep. It appears that Winter may be heading this way. The 8-14 day forecast is now calling for the onset of below normal temperatures east of the Mississippi. As demand increases, there may some upward pressure placed on energy prices.
For now, gas prices are near the eight year low, and electricity prices are near the seven year low.