For the first time in six weeks, we saw an increase in natural gas prices. The 12-month average price for natural gas on the NYMEX rose 4.7% for this report period. Electricity prices rose for the third time in six weeks. For this report period, the 12-month average price for peak power on the PJM rose 2.5%.
Even though the energy markets saw a small price increase this week, the big picture remains the same. Natural gas and electricity prices are hovering near a 10-year low because we are coming off the fourth warmest winter on record, which helped create a record-high natural gas surplus. And, production is plentiful. The gas surplus over the five-year average sits at 55%.
However, the big question is how long this supply-and-demand imbalance last. Summer is on the way, producers are beginning to shut-in their natural gas wells, electric power plants are switching from burning coal to burning natural gas, and energy companies are trying to export the surplus natural gas to the overseas markets.