5 bcf/d Drop in Gas Demand from Power Sector in August Due to Weather
10 year average weather for August would produce gas demand near 30 bcf/d for the electric power sector. However, given the weather, gas demand is closer to our Power Market Analsyis (PMA) low gas demand case around 25 bcf/d. This is having a significant impact on storage causing weakness in gas prices. The storage levels are tracking closer to our low gas demand case as described in our previous article on extreme weather. This case had gas prices falling to $3.5/mmbtu. The models would indicate there is a greater chance for $3.5/mmbtu gas than $4.5/mmbtu gas assuming an ending inventory target in October of 3.4-3.5 tcf.
PMA now offers state by state gas demand in the format supplied by the EIA. One can use the data to feed into your gas pipeline model to calculate basis – such as the Gas Pipeline Competition Model (GCPM) by RBAC. A free sample file is available for download. This file is routinely produced and can be customized to your own sensitivities. Below are two graphs which can be generated from the file.
We will be coming out with a winter outlook report in the coming weeks. Please consider signing up to PMA to get the winter outlook. We have a 30 day trial for only $1000 which will give you full access.
Your Energy Consultant,
David
David K. Bellman
Founder & Principal
All Energy Consulting LLC
“Independent analysis and opinions without a bias.”
614-356-0484
[email protected]
blog: http://allenergyconsulting.com/blog/category/market-insights/
