Natural gas to power generation, which tends to average about 15 Bcf per day from January to mid-May, has averaged 25 Bcf per day in July. July averages for the power generation market in 2007 and 2008 were also in the 25-26 Bcf per day range.
However, late July to early August has seen peaks in natural gas consumption for power of as much as 38 Bcf per day going back to 2007. Those peaks have not been seriously challenged so far in 2009. Along with reduced industrial natural gas consumption and a still strong supply position, daily markets have still balanced at a Henry Hub pricing point around $3.50 per MMBtu.
However, if predictions of a cold winter hold true, and if rumblings of economic recovery translate into to sustained growth in the near term, how the demand side of the gas equation interacts with what remains a robust supply picture may become a very interesting question in the coming months.
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