Energy prices were all over the board this week. For example, natural gas prices as traded on the New York Mercantile Exchange for the forward month rose $.05/therm on Wednesday and then fell $.045/therm on Thursday.
Once the dust settled, for this seven-day report period, the average 12-month price for natural gas on the New York Mercantile Exchange (NYMEX) rose 1%, and the 12-month average price for peak power on the PJM fell 3.5%. Luckily, the moderating weather forecast kept prices from mimicking last week's big price spike.
Where energy prices go from here depend on the February weather patterns. We are hopeful that the polar vortexes stay to the north.
These colder than normal temperatures are wreaking havoc on the natural gas storage fields. Last year at this time, natural gas inventories were 12% above the five-year average. However, storage levels at the end of this report period were 16% 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 help keep on a lid on energy prices.