For the twentieth (20) straight week the increase of natural gas in storage has exceeded the 5-year average. Back in April you will remember we were 50% below the 5-year average, and this morning’s report shows we are now only 15.4% short of the average for this time of the year.
Record production of gas and cooler temperatures are pushing up the amount of gas we have in storage, and therefore we should get back to the 3,500 – 3,600 bcf of gas we will need in storage to get us through another cold winter. The analysts were expecting an increase in this morning’s Natural Gas Storage Report to be 73 bcf, and it came in with a nice plus 79 bcf.
The current gas contract (October) has been in a trading range, as you know, between $4.10 and $3.72. This morning’s report pushed the price down to a low of $3.789 and is currently trading right at $3.80, near the lower end of this range. The experts look for our weather to be cold this winter, but not as cold as last year. They expect the price of gas to move up to a trading range of $4.40 to $4.10. September and October should be great for locking in today’s lower rates.
A couple of new items – first, you all should have received our official change of address notice so you should have the new home office address and phone numbers.
Second, welcome Dan McCaslin on board with Power Energy USA. Dan joined us yesterday and is in the Round Rock – Austin area.