Current Commodity Pricing
Commodities such as natural gas, crude oil and gasoline are traded on the open market 24/7. Energy commodities trade on the New York Mercantile Exchange (NYMEX) and are accessible by way of the CME Group. Many factors can influence the current price of a commodity but longer term trends ultimately reflect the expected future balance of supply and demand.
Energy Price Links:
Extreme price volatility in energy markets is most commonly associated with surprises attributable to weather related events. High demand for heating during a cold winter is the most obvious example. In recent years, hot summer weather has also become a significant factor as energy demand fluctuates with rising air conditioning loads. A final example is hurricane and tropical storm activity which, during the late summer/fall can have a significant impact on Gulf energy production. The bottom line is that weather is still a major driver of energy prices, especially as it relates to volatility in the near term. Short and Long term weather forecasts are available through the NOAA’s Climate Prediction Center and the National Hurricane Center.
As is the case with most products and services, energy prices fluctuate based upon the basic fundamentals of supply and demand. Supply is affected by factors such as production, deliverability and inventory. Demand is affected by factors such as weather, economic conditions, exports and alternate fuel prices. The Energy Information Association (EIA) serves as a valuable resource for staying on top of energy market fundamentals.