The end of October and the first two weeks of November ushered in some unusually cold temperatures. Fortunately, the cold spell was short-lived and had a short-lived impact on gas prices and a minimal impact on electricity prices.
For example, from October 25, 2019, to November 15, 2019, natural gas prices in the forward 12 months increased by 6.8%. At the same time, electricity prices actually fell by 1%.
However, as we entered the second half of November, the National Weather Service predicted the arrival of warmer than normal temperatures for December. Energy prices fell as soon as the warm forecast hit the wires.
Over the last two weeks, from November 15, 2019, to November 29, 2019, natural gas prices in the forward 12 months fell by 9.6%, and electricity prices fell by 4%. From this recent experience, it is obvious that the weather is driving energy prices for now.
Luckily, there is a good chance that this winter’s cold snaps will have a minimal impact on energy prices because the industry is starting this winter with full inventories and record-high gas production.