Natural gas and electricity prices were unable to string together two price increases in a row. For this seven day report period, energy prices fell. The 12 month average price for natural gas on the NYMEX fell 4.7% and the 12 month average price for peak power on the PJM fell 4.2%. This week's price decrease neutralized last week's price increase.
The dominant theme this week was that natural gas storage was well above both last year's levels and the five year average. And the storage surplus continues to grow. The year-to- year surplus grew from 1.1% to 2.7%. The surplus over the five year average grew from 7% to 8.7%. With the 8-14 day forecast calling for normal to above normal temperatures, the storage surplus will likely remain with us for the short term. This growing storage surplus is keeping downward pressure on prices.
A variable to watch: States like Wyoming, Pennsylvania and New York continue to debate the impact that shale gas drilling has on water supplies. It is becoming a very controversial issue and could eventually impact the amount of shale gas that enters the marketplace.