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BlogNatural Gas

Power and Gas Demand Have Returned

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By July 24, 2020 No Comments

Recent days’ have been at or above those of 2019.

Hot weather in the last two weeks sent electricity demand up near normal levels for this time of year, even after controlling for temperature. Gas demand has performed even better.

The chart below shows total electricity demand (i.e. “load”) for the U.S., compared to the average temperature across the country. The green dots low on the chart, in the 50-70 degree Fahrenheit range, show how social-distancing and commercial closures suppressed electricity demand in late spring. However, just as summer heat arrived, total load snapped back up to normal (yellow and red markers).

This spring, the Covid-19 effect reduced total electricity demand to multi-decade lows
Recently, EIA-930 data show total power consumption is back to normal levels

With more power demand, gas demand can achieve higher numbers, too. The chart below again shows average U.S. temperature, but total gas-fired generation is on the vertical axis.

Early in the year, gas-fired generation was higher than in 2019, but collapsed to prior-year levels due to Covid-19. Recently, with average daily temperatures near 80 degrees, gas demand has typically been at or above last year’s, at the same temperature.

Before Covid-19, gas-for-power demand this year was trending above 2019’s by the equivalent of 2-3 Bcf/d
In recent days, gas demand has moved higher than last year’s, at the same temperature

This is good news for the rest of 2020’s natural gas supply-demand balance. Power has been supporting this market during summer (see our notes in the AEGIS Factor Matrix), and it could play an important role this fall.

But we should note some caution: If prices rise, some of that gas demand could be lost to natty’s nemesis, coal. Therefore, we don’t consider these developments in the power sector as bullish, but rather a price-supporting mechanism that could keep prices afloat for the balance of 2020.

We continue to monitor oil, gas, NGLs, and regional markets for hedging opportunities. To learn more and see AEGIS opinion and recommendations, go to AEGIS View publications, or contact Like what you see? Share this article with the button on the bottom right of your desktop. Market questions or comments? Contact us at

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