Finally, after five weeks of price increases, energy prices closed flat this week. For this seven-day report period, the average 12-month price for natural gas on the NYMEX was nearly identical to last week's close, and the 12-month average price for peak power on the PJM was also flat relative to last week's closing numbers.
As you may recall, natural gas and electricity prices spiked upward during the previous five weeks. From September 7 to October 11, 2012, natural gas prices rose approximately 17.4% and electricity prices rose 8.1%. According to most analysts, the onset of cold weather was the fundamental variable that kept upward pressure on energy prices during that cool five-week period. Consumers were turning on their space heaters.
However, as referenced in last week's "Editor's Note," we were curious how market prices would respond this week to the six to10-day forecast calling for warmer-than-normal temperatures in the northeastern United States. We have our answer. The return to normal weather helped place a halt to the recent price spikes. Stay tuned. The eight to 14 day forecast, once again, calls for above-average temperatures east of the Mississippi.