For a second week in a row energy prices barely budged. For this seven-day report period, the average 12-month price for natural gas on the New York Mercantile Exchange (NYMEX) dropped by less than 1% and the 12-month average price for peak power on the PJM dropped by less than 1%.
National temperatures from January 18 to January 25 were close to normal, although here in the mid-Atlantic region we experienced some of the coldest weather of the year during this time period. According to the Energy Information Administration, "temperatures in the Lower 48 states averaged 33 degrees, compared to the 35.7 degrees last year and the 30-year normal of 33.1 degrees."
Without sustained colder-than-normal temperatures, energy prices have been unable to sustain any major price spikes.
Although we have experienced a couple of weeks that were colder than normal, most of the winter has actually been warmer than normal. Locally, December 2012 was 23% warmer than normal and January 2013 was 16% warmer than normal.
Winter temperatures have not been cold enough to cause a serious degradation of the natural gas storage bubble. This week's natural gas storage report shows that storage levels are still 12% above the five-year average.
Unless colder-than-normal temperatures make a long-term visit in February, energy prices may have a tough time staging a winter rally. Stay tuned. The 14 day extended forecast from AccuWeather for the Washington, D.C. region (view details) calls for warmer-than-average temperatures for the first two weeks February.