October natural gas is set to open 2 cents higher Wednesday morning at $2.85 as traders factor in production losses resulting from weather-driven Gulf of Mexico shut-ins. Overnight oil markets fell.

According to traders, Tuesday’s decline had more to do with trader dynamics than fundamental factors. According to Tim Evans at Citi Futures Perspective, the 7-cent decline was prompted by “profit taking after prices failed to clear Friday’s high. A slightly cooler 11-15 day temperature forecast may have encouraged selling, although we note that 346 MMcf/d of natural gas production from the Gulf of Mexico was shut in as a precaution due to Tropical Depression No. 9, nearly double Monday’s outage.”

The tropical storms affecting the Gulf and East Coast may not seem like much, but gas production is getting shut in nonetheless. Industry consultant Genscape calculates that about 190 MMcf/d of Gulf of Mexico production has been shut in due to the approaching tropical weather systems. “Offshore operators are evacuating platforms and rigs in the path of Tropical Depression NINE. NOAA noted last night that the storm system is becoming more organized and issued tropical storm and hurricane watches for areas of the GOM. The system is moving northwestward and may hit the northwestern Florida coast by Thursday.

“Personnel have been evacuated from six production platforms, and a total of five DP rigs have moved off location out of the storm’s path as a precaution. The U.S. Department of Interior’s Bureau of Safety and Environmental Enforcement (BSEE) estimates that approximately 11.48% of current oil production in the Gulf has been shut in,” it said in a morning report.

At 5 a.m. EDT the National Hurricane Center (NHC) reported that Tropical Depression 8 was heading along the North Carolina coast. It was 75 miles east-southeast of Cape Hatteras and continued to hold 35 mph winds. It was heading northeast at 5 mph, and NHC said no coastal watches were in effect. It could become a tropical storm later Wednesday.

Tropical Depression 9 now presents the clearer threat and was situated 420 miles west-southwest of Tampa, FL, and and continued to hold 35 mph winds. It was moving to the north at 2 mph. NHC said it would likely become a Tropical Storm later Wednesday, and Tropical Storm warnings were in effect for portions of coastal Florida.

In overnight Globex trading October crude oil fell 45 cents to $45.90/bbl and October RBOB gasoline fell 2 cents to $1.3533/gal.