The natural gas supply demand story has been dominated all year by the record storage overhang from 2011 and whether 2012 gas storage injections could continue until October or November without hitting the wall - i.e. completely filling storage capacity. In today’s blog we review the BENTEK supply demand numbers and then investigate power burn indicators - uncovering a close shave in the coal-to-gas fuel-switching window.
The last time we provided an update based on BENTEK’s supply/demand numbers was in early June (see “Dodge The Bullet – NG Supply Overhang Correcting”). Back then the natural gas power burn “sensation” was riding high and keeping the storage wall naysayers’ necks wound in. Natural gas NYMEX prices were under $2.50/MMbtu and production for the year to June had been basically flat.