Even though it was a relatively uneventful news week for natural gas and electricity, we still saw a small price decrease for the third week in a row. During this seven-day report period the average 12-month price for natural gas on the New York Mercantile Exchange (NYMEX) fell 1.4 %. The 12-month average price for peak power on the PJM fell by less than 1%.
After the price rally from March we revel in any price decline that comes our way. This was only the fourth time in eleven weeks that we experienced a downward move. The one news story that kept some downward pressure on energy prices this week was from the Energy Information Administration's weekly storage report. According to EIA, we saw our first above average injection of the refill season. This week's injection was 88 Bcf which was the largest injection of the re-fill season.
However, we will need many more above-average injections if we hope to keep a lid on prices. As you know, the gas bubble from a year ago has disappeared. The natural storage levels were 5% below the five-year average and 28% below last year's levels.
At the risk of being redundant, the next wild card to watch is the summer weather. If we have a hot summer and natural gas is directed to the power plants instead of the storage fields, we may see more upward pressure on both natural gas and electricity prices. Hot weather is a big wild card because more and more power plants are switching from coal to natural gas.