Tuesday, February 21, 2017

Natural Gas: The Cure For Low Prices

The case study that is MISO coal/gas switching continues to reflect the dynamics of a changing price environment for gas.
The very recent crashing prices are sparking, as it were, a resurgence in gas fired power generation.  

Although there is no gas price so low that it stimulates cold weather, the recent days have seen gas retaking market share, with yesterday's demand adjusted market share at 30%, which is double the February average, and within 6% points of the levels of last November, when gas was around $2.75.  We should see abrupt increases in market share all week, if the December price spike is any indication of the rapidity of the price response.