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The April natural gas exchange contract rallied throughout the day yesterday and looked as though this wholesale contract month would see $4.50 just one day before today’s expiration. But with 10 minutes to go before the day’s settlement, the short term energy traders came out of the woodwork and began selling this wholesale contract back down and we dipped back down settling at $4.374, down $0.029 on the day. The rest of this week shows below to much below average temperatures predicted for the eastern half of the country and then it looks like things will warm up quickly. The 6 to 15 day forecast calls for above to much above average temperatures predicted for the South and Midwest. This week’s EIA storage report shows a 12 bcf build this week last year and some folks believe that the report will come out with a 10 bcf withdrawal adding an additional 22 bcf to the already widening deficit versus last year.
On the electricity front in Japan, utility experts and economists say it will take many months, possibly into next year, to get anywhere close to restoring full power and the places most affected are not only in the earthquake-ravaged areas but also in the economically crucial region closer to Tokyo. This region close to Tokyo is having to ration power because of the big chunk of the nation’s electrical generating capacity that was knocked out by the quake or washed away by the tsunami. Besides the dangerously disabled Fukushima Daiichi nuclear power plant, three other nuclear plants, six coal-fired plants and 11 oil-fired power plants were initially shut down, according to PFC Energy, an international consulting firm. By some measures, as much as 20 percent of the total generating capacity of the region’s dominant utility, the Tokyo Electric Power Company, or an estimated 11 percent of Japan’s total power is out of service. Until all the lost or suspended generating capacity is replaced, economists say, factories will operate at reduced levels, untold numbers of cars and other products will go unbuilt and legions of shoppers will cut back their buying which will take a big toll on Japan’s economy.
Some energy executives at leading energy companies expect the nuclear disaster in Japan to underpin a shift toward the increased use of natural gas worldwide, executives said at a U.S. industry conference on Monday. That would work well with the plans of U.S. producer Apache Corp, which with partners aims to build an export terminal for liquefied natural gas in western Canada to serve Asian customers. "That gas becomes more interesting to the market than it probably was three months ago," Steve Farris, Apache's chief executive, told the Howard Weil Energy Conference in New Orleans. Apache is advancing plans to open the Kitimat LNG terminal in Canada, where it holds shale gas acreage. The nuclear disaster gripping Japan could have long-term implications for all gas producers if Japan backs away from nuclear power. Already, official industry projections are for natural gas demand to grow by about 1.5 percent annually through 2035 and some other forecasts are even more bullish, projecting annual growth rates of about 2 percent. The crisis is already shaking up Japan's LNG trade. Tokyo Gas Co Japan's biggest city gas supplier, said on Monday it had diverted an unspecified volume of LNG to Tokyo Electric Power Co to make up for output lost from two nuclear plants after this month's huge quake. While TEPCO may have spare fuel supplies now, as some of its thermal plants remain shut following the quake, it has said it will need more fuel, mainly LNG, for the summer to maximize thermal power production. The magnitude 9.0 quake on March 11 forced the closure of 23 percent of its total power sources, including hydro plants. The impact on fuel markets has been felt in pockets elsewhere, ranging from a boost to LNG stocks in Britain to trans-Pacific trade.
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