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The estimates for yesterday’s natural gas storage report ranged from a draw of 77 bcf to a draw of 81 bcf and when the actual draw of 71 bcf was announced, sellers came in and sold the natural gas market down to the $3.78 area. This report now puts total stocks at 1,674 Bcf which is 32 Bcf above the date adjusted year ago level and 20 Bcf above the 5 year average. The April natural gas wholesale contract then turned back around and spent the rest of the session right around $3.83 and settled there on the day. The 6 to 10 day forecast shows much above average temperatures for the entire central US while the 11 to 15 day forecast shows much above average temperatures only in Texas, Oklahoma and Louisiana. Keep in mind that much above average temperatures during the middle of March are very different than much above average temperatures in July.
On world events this morning, a ferocious tsunami spawned by one of the largest earthquakes ever recorded slammed Japan's eastern coast Friday, killing at least 60 people as it swept away boats, cars and homes while widespread fires burned out of control. The U.S. Geological Survey said the 2:46 p.m. quake was a magnitude 8.9, the biggest earthquake to hit Japan since officials began keeping records in the late 1800s while tsunami warnings blanketed the Pacific Islands and a tsunami expected to hit Hawaii this morning at 8 AM eastern time while waves are predicted to hit the western coast of the United States between 11 a.m. and 11:30 a.m. eastern time Friday. People near the beach and in low-lying coastal areas of Point Conception in Santa Barbara County were told to move immediately inland to higher ground. The magnitude 8.9 offshore quake unleashed a 23-foot (7-meter) tsunami and was followed by more than 20 aftershocks for hours, most of them of more than magnitude 6.0.
This earthquake also caused some damage to a nuclear power plant and a state of emergency was declared after its cooling system failed following the massive earthquake. There was no radiation leak; however, Chief Cabinet Secretary Yukio Edano said the measure was a precaution and that the Fukushima No. 1 power plant was not in immediate danger. The plant has shut down in the meantime. The plant experienced a mechanical failure in the system needed to cool the reactor after a power failure during Friday's earthquake. The reactor core remains hot and requires cooling after a shutdown. As occurred several years ago when the previous nuclear plant went down, Japan soaked all excess LNG ships and caused the price of natural gas to rise due to their power supplies or nuclear reactor being down.
On the weather front, NOAA yesterday said that the La Nina continued to weaken in February and neutral conditions are expected by June. However, the La Nina will continue to have global impacts even as the episode weakens through the spring in the northern hemisphere.
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