For this seven-day report period, natural gas and electricity prices closed flat relative to the previous week's closing numbers. The average 12-month price for natural gas on the New York Mercantile Exchange (NYMEX) and the 12-month average price for peak power on the PJM both fell by less than 1%.
In late summer and early autumn, we saw a brief run up in natural gas and electricity prices. From September 7 to October 11, 2012 natural gas prices on the NYMEX rose 24% and electricity prices on the PJM transmission grid rose 9.8%.
However, temperatures moderated during the last three weeks. The price rally lost momentum and prices leveled off. Since October 11, 2012 natural gas prices have increased by 2.9% and electricity prices have dropped by 1%.
One variable that helped place a lid on the recent price surge was the natural gas storage inventories. According to the Energy Information Administration, gas inventories just hit a record high for this time of year. The traditional natural gas injection season runs from April 1 to November 1. We will begin the heating season with a record-high 3,908 Bcf in storage. The previous record-high storage level was 3,852 Bcf, set one year ago on November 8, 2011.
We are ready for the winter heating season. Now the big question is how quickly the gas bubble will disappear if we have a cold winter this year.