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The November wholesale contract was lower by another $0.068 on the day as warmer weather conditions are over-riding all estimates on the upcoming colder than normal temperatures this winter that everyone is forecasting. Accuweather even came out and indicated that that heavy snow and extreme cold should be expected in the north central United States, especially in the Chicago area, in the coming winter. The East Coast faces average to slightly above average snowfall during the winter of 2011-2012 as a Pacific La Nina again drives weather patterns across the United States. The spokesperson from Accuweather even was quoted as stating that "People in Chicago are going to want to move after this winter,"(Glad I don’t live in Chicago).
Accuweather's forecast projects Chicago will again be hit by extreme cold weather and several blizzards, as it endured last winter when more than 50 inches fell on the city including a single storm that dropped 20 inches. Severe cold and heavy snow should be expected from the Great Lakes across the Midwest and northern plains states, according to Accuweather. La Nina, the name for a recurring phenomenon when sea surface temperatures across the central and eastern Pacific Ocean are below normal, will fuel extreme weather across North America, including a persistent flow of tropical moisture that brings heavy rains to the West Coast called the "Pineapple Express." The southeastern United States could again see flooding in the lower Mississippi Valley in late winter, Accuweather said. Dry, mild weather is expected over most of the southwestern United States, with no relief seen for drought-stricken Texas. The Mid-Atlantic States could see snow and ice with South Carolina and Georgia seeing rain. Florida should expect a mild, dry winter.
As we do on every Thursday, we’ll focus the rest of the commentary on the winter gas tank in the natural gas market. U.S. natural gas inventories are expected to have climbed by 98 billion cubic feet last week, a Reuter’s poll of industry traders and analysts showed on Wednesday. There were 26 participants in the Reuters poll, with injection estimates ranging from 93 bcf to 104 bcf. Storage rose an adjusted 84 bcf for the same week last year. The five-year average build for that week is 74 bcf.
In last week's report, for the week ended Sept. 23, overall storage climbed 111 bcf to 3.312 trillion cubic feet, well above the Reuters estimate of 100 bcf, the year-ago rise of 73 bcf and the five-year average gain for that week of 71 bcf. The build reduced the inventory shortfall relative to last year for the sixth time in seven weeks, trimming the total by 38 bcf to 91 bcf, or 2.7 percent. It also eliminated the gap to the five-year average, leaving stocks at a 5-bcf surplus. It was the first time stocks climbed above average since mid-April. Most traders expect the inventory shortfall compared to last year to narrow sharply this month, with some looking for three more triple-digit builds as mild weather slows demand.
A build this morning at the Reuters estimate would trim the shortfall compared to last year by 15 bcf to 76 bcf, or 2.2 percent, and increase the surplus to the five-year average by 25 bcf to 30 bcf, or nearly 1 percent. In the past four reports, total stocks rose 351 bcf, or 88 bcf per week, versus a 305 bcf adjusted build for the same one-month period last year and a 286-bcf five-year average gain for that period. Early injection estimates for next week's EIA report range from 98 bcf to 113 bcf versus a year-ago build of 90 bcf and a five-year average increase for that week of 72 bcf. If weekly stock builds through October match the five-year average pace, inventories will begin next heating season with 3.608 tcf, 6 percent below last November's record high of 3.84 tcf but about flat with the average for that time of year. With six weeks left in the stock building season, most analysts expect storage to peak this year at about 3.7 tcf.
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