RECORD HIGH TEMPS BRING RECORD LOW PRICES
Although winter may be considered in its early stages we have already seen both high temperature and low price records broken across the midwestern and eastern parts of the United States. As shown in the table below - with data compiled
from the National Weather Service and Weather Underground - the winter “heatwave” saw recent weekend temperatures soar into the 60s/70s for parts of the country where January readings generally stay below 40 degrees Fahrenheit.
As a result of the extreme and unseasonable heat, new January low price records were set in the Midwest and East. The price below represents the simple average of all Day Ahead LMPs at the respective Hub or Zone for a single day, the prices are record lows for any January day in history.
Countering this “bearish” start to winter, the famed Farmers’ Almanac has called for below average temps in February and March. Indeed, short term forecasts are calling for more seasonable weather over the next two weeks and LMPs are already trending higher. Energy market participants have a vigilant eye towards daily weather reports – wondering if warm weather will keep prices cool or if frigid temps will show up and bring price spikes with them.