Natural gas and electricity prices are range bound for now. Over the past five weeks, prices have increased one week but then have immediately fallen the next week. Here we go again. Last week, the average price for natural gas on the NYMEX fell 5% while the 12-month average price for power on the PJM remained flat. For this seven-day report period, prices ran in the opposite direction. The average price for natural gas on the NYMEX rose 1.7%. The 12-month average price for peak power on the PJM actually fell 0.2%, a very slight decrease but, nevertheless, a decrease.
There is a new variable hitting the news wires today, however, that may place some upward pressure on energy prices. The big story is Tropical Storm Isaac, which is gaining intensity in the Caribbean and possibly heading for the Gulf of Mexico. If natural gas producers are forced to shut-in their wells during the storm, we may see some price spikes next week. Stay tuned.