Natural gas prices fell slightly for the third week in a row, while electricity prices were relatively flat. For this seven-day period, the average 12-month price for natural gas on the New York Mercantile Exchange (NYMEX) fell 2%, and the 12-month average price for peak power on the PJM was almost identical to the previous week's close.
Over the last three weeks, natural gas prices, as traded on NYMEX's 12 month strip, have fallen approximately $0.03 per therm or 7%. Electricity prices, as traded on PJM's 12 month strip, have fallen approximately 3.7% over the same three-week period.
Are prices lower because the marketplace has already concluded that we have enough natural gas to meet this winter's heating demand? While natural gas production levels are operating near all-time highs, and the natural gas storage fields are 1.5% above the five-year average, winter does not even officially start until December 21.
It is too early to predict where energy prices will go from here. Although natural gas has been burned increasingly during the summer months as more coal-fired power plants switch to natural gas, winter is still the peak demand season. And according to the recent 6-10 day forecast from the National Oceanic and Atmospheric Administration (NOAA), cold temperatures are heading this way next week. We may even see our first snow storm of the season next Wednesday.