Peak Oil

Concerns and worry about Peak Oil are overstated and irrelevant. Many articles and books have been written on the topic and many lectures given. Dire predictions have been made and many people have concluded that because of peaking of crude oil production, the future of the human race is bleak. Peak Oil theory seems so…

Read More

Three Years Ago

Just about three years ago, on April 19, 2012, the prompt-month (see Note 1) natural gas futures contract closed at $1.91 per mmBtu, a twelve year low. On April 9, 2015, the prompt-month contract closed at $2.53 per mmBtu. Are natural gas prices higher now, in April 2015, than they were in April 2012? The…

Read More

Natural Gas Market Update

Over the past 12 months, natural gas prices have fallen 52%. Looking ahead, the graphs below each look at natural gas prices in the futures market starting at two different points in time: June 24, 2014 and January 5, 2015. The first graph extends two years into the future and the second graph five years.…

Read More

Are Crude Oil and Natural Gas Reconciling?

Crude oil prices have dropped 38% since June for two reasons. Shale oil production in the US Bakken, Eagle Ford, and Permian basins has increased dramatically – by more than 4 million barrels per day since 2008. At the same time, worldwide demand for crude oil has declined as a result of slowing economies in…

Read More

Natural Gas Market Update

The above graph looks at natural gas prices going back to January 1997. Natural gas prices have retreated from the Polar Vortex bump and remain relatively low by historical standards. The prices plotted above are not adjusted for inflation. If they were in 2014 dollars, the left side of the curve would be more elevated.…

Read More

What Does Volatility Look Like?

This article looks at how cold weather led to great volatility in real-time wholesale electricity prices during January 2014 in the PJM Interconnection (PJM). The month of January 2014 was the coldest in decades in the US as a Polar Vortex pushed its way into the Midwest, South, and East. Winter electricity use in the…

Read More

What Does an Extended Cold Spell Look Like?

This is a follow up to our blog posted Monday evening titled “What Does a Cold Day Look Like?” and looks at the impact on real-time wholesale electricity pricing of extended cold weather. We reported that as a result of Winter Storm Hercules barreling through the Mid-West, Mid-Atlantic and Northeast last Thursday and Friday (January…

Read More

What Does a Cold Day Look Like?

In previous blog posts, we have examined how weather and other events affect electricity prices. What Does a Superstorm (Sandy) Look Like? What Does a Derecho Look Like? What Does a Warm Day Look Like? What Does an Earthquake Look Like? We continue this series by looking at how electricity prices in the PJM Interconnection…

Read More

Real Electricity Prices (Energy Prices Always Go Up, Part 5)

This article is part of an occasional series that examines the common perception that energy prices always go up. We have examined both electricity prices (read hereand here) and natural gas prices (read hereand here). An article published recently by CNSNews.com states that, according to the Bureau of Labor Statistics (BLS), “The price of electricity…

Read More

Market Update, November 6, 2013

For buyers, pricing in the wholesale natural gas market is attractive. The graph below shows natural gas prices over the past ten years. While we are not at the absolute low, we are near the bottom. The next graph shows the 24 month forward curve for natural gas. The line is upward sloping, meaning the…

Read More