Natural Gas Fundamental Analysis – August 17, 2015 – Forecast

Analysis and Recommendations:

Natural Gas gained 9 points as traders watched the temperatures soar across the US. The Midwest is scorching hot increasing demand for power production. Consumption of natural gas for power generation (power burn) in Texas is at a record high, according to data from Bentek Energy. Daily consumption in 2015, through August 11, has averaged 4.5 billion cubic feet per day (Bcf/d). The next-highest level was 4.4 Bcf/d, for the same period in 2012. Over the whole year in 2012, generation averaged 4.2 Bcf/d. Because of its large population, hot summer weather, and large amount of natural gas capacity, Texas consumes more gas for power generation than any other state in the country. In 2014, for example, Texas consumed 3.9 Bcf/d of natural gas for power generation (18% of total U.S. power generation), according to EIA data. Florida was a distant second, at 2.9 Bcf/d.

AccuWeather US Forecast Outlook:

A hot dome of high pressure will dominate much of the country with widespread upper 80s to 100s, including all of Texas. The exceptions will be over the NW, Great Lakes, and NE as weather systems sweep through with showers, thunderstorms, and slightly cooler than normal temperatures. It will be most uncomfortable over eastern Texas and the South where high humidities will result in strong demand for cooling as the Heat Index exceeds 105F. Hot high pressure will begin to gain ground back over the northern US this weekend into next week, this will increase cooling national cooling demand from MODERATE-HIGH to HIGH.

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