For this seven-day report period, the average 12-month price for natural gas on the New York Mercantile Exchange (NYMEX) fell 4.5% and the 12-month average price for peak power on the PJM fell 1.2 %. Although there were a number of variables that could have placed upward pressure on energy prices this week, the good news was that all eyes seemed focused on the fact that Spring starts March 20th and that the traditional heating season is almost over.
The marketplace seemed happy to know that Winter is almost over as the 6-10 day outlook from the National Oceanic and Atmospheric Administration called for the return of normal temperatures for most parts of the country east of the Mississippi for March19- March 23.
If the marketplace had focused on this week's natural storage report, energy prices could have spiked upward again. This week's natural gas withdrawal set an all-time high for the month of March. The week's withdrawal of 195 Bcf was more than double the five-year average withdrawal of 95 Bcf. The natural gas storage fields were 46% below the five-year average. Two years ago, the natural gas storage levels were 51% above the five-year average.
Although energy markets were bearish this week, analysts were worried that energy prices could spike upward if we experience both an unusually hot summer and a continuation of low storage levels. The storage fields are operating at an 11 year low. To offset this larger than normal deficit, the utilities will have to inject more gas than usual into the caverns during the upcoming re-fill season. This additional demand component could place upward pressure on energy prices during the summer months.