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The August wholesale natural gas contract was lower yesterday ahead of the EIA storage report today falling $0.146 or 3.46% on the day due to the weather forecasts continuing to stay slightly above normal to normal in the 6-10 day forecasts with no additional cooling demand forecasted from the meteorologists to spur energy buying. Today’s EIA storage report is coming out at a storage build of 87 bcf from Bentek, while Pira is at a 82 bcf injection and Reuter’s below is at 80 bcf. This is in comparison to last year’s storage build of 76 bcf which would reduce the year on year storage deficit by about 4 bcf. We are expecting a number below 75 bcf to motivate buyers to not be so negative or bearish on short term prices and a figure above 85 bcf to keep natural gas prices under pressure in the short run.
On the deregulation front this week, the weekly Pennsylvania customer migration report states during the most recent week that at PPL customer migration was 2,493 customers switching to a new energy supplier up from the previous week of 1,870 customer in the previous week. The variance was also higher in PECO which was 4,325 customers moving away from the utility and moving to another supplier from the previous week of 3,203 customers the previous week. 40.3% of the customers have switched in PPL while PECO has only 21% of the customers switching. On a statewide total basis with the other regulated utilities, only 21.3% of the eligible customers have switched according to the WeeklyPAPowerSwitch report updated through the end of June.
As we do on every Thursday, we’ll focus the rest of the commentary on the storage levels. U.S. natural gas inventories are expected to be up 80 billion cubic feet for last week when storage data is released this morning, a Reuter’s poll of 20 industry traders and analysts showed Wednesday. Injection estimates ranged from 69 bcf to 88 bcf. Storage rose an adjusted 76 bcf for the same week last year, while the five-year average build for that week is 80 bcf.
In last week's report, for the week ended June 24, overall storage climbed 78 bcf to 2.432 trillion cubic feet, above Reuters estimates for an 88 bcf gain, the year-ago rise of 63 bcf and the five-year average gain for that week of 77 bcf. The build left stocks 243 bcf, or 9 percent, below last year and 63 bcf, or 2.5 percent, below the five-year average.
In the last four reports, total stocks rose 325 bcf, or 81 bcf per week, versus a 331 bcf adjusted build for the same one-month period last year and a 346-bcf five-year average gain for that period. Early injection estimates for next week's EIA report range from 68 bcf to 80 bcf versus a year-ago build of 78 bcf and a five-year average increase for that week of 88 bcf. Storage ended March with 1.585 tcf in the ground, or about 1 percent below the five-year average, after a cold winter trimmed stocks from an all-time high of 3.84 tcf in early November. If weekly stock builds through October match the five-year average pace, inventories will begin next heating season with 3.54 tcf, about 8 percent below last November's high and 2 percent below average for that time of year. To get inventories above last year's record high by Nov. 1, weekly injections must average 75 bcf for the remaining 19 weeks of the stock building season, well above the five-year average of 58 bcf for that period.
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