For the second week in row, energy prices spiked upward. For this seven-day report period, the average 12-month price for natural gas on the New York Mercantile Exchange (NYMEX) rose 4.1%, and the 12-month average price for peak power on the PJM rose 9%.

The onset of extremely cold temperatures in the lower 48 states is keeping upward pressure on energy prices. Not only are prices rising on both natural gas and electricity "futures contracts," the prices for spot gas and spot electricity in the daily markets are trading at an all-time high. Natural gas prices for next day delivery  are trading at more than $10/therm and daily electricity prices are trading for more than $.50/kwh in the daily spot markets.

The impact of the colder than normal temperatures can also be seen in the natural gas storage levels. The colder than normal temperatures are creating record withdrawals from the natural gas storage fields. Last year at this time natural gas inventories were 12% above the five-year average. Storage levels at the end of this report period however, were 13.2 % below the five-year average.

The record demand for both natural gas and electricity and the growing storage deficit are keeping upward pressure on energy prices. We need a warming trend to calm the markets. Think spring.