Ivan was back for an encore performance in the Gulf of Mexico production area as a tropical storm, but spot prices responded more to weak fundamental demand Thursday as they ranged a few cents to either side of flat in the Gulf Coast and Northeast but were flat to down about 15 cents in the Midcontinent/Midwest and West.

The pace of restoring shut-in offshore production slowed again as the Minerals Management Service office in New Orleans said 2,330.37 MMcf/d remained offline, reflecting the reports of 20 companies as of 11:30 a.m. CDT Thursday. It was a gain of only about 70 MMcf/d from Wednesday, when flows had increased nearly 400 MMcf/d from the day before. The tally of evacuated platforms actually increased to 39 from 32 on Wednesday, MMS said. The cumulative total of shut-in gas production from Sept. 13 through Thursday rose to 49.947 Bcf, which equals 0.92% of the Gulf’s approximately 4.45 Tcf in yearly output, it added.

One source observed that not only was the task of restarting shut-in wells being hampered by extensive infrastructure damage from Hurricane Ivan’s first foray through the Gulf (including at least seven destroyed platforms and a number of pipeline leaks) and inclement weather earlier this week that was reinforced by Ivan’s reappearance, but some companies were having to wait on a limited amount of repair resources such as dive teams to become available.

One might have expected shut-ins to start rising again with Tropical Storm Ivan headed toward the Houston-Galveston area of southeast Texas, meaning it was moving through the central Gulf production area this time instead of along its eastern edge as it did last while still meriting hurricane status. But producers apparently were prepared to tough it out this time, with none reporting plans for new flow suspensions Thursday (see related story).

Ivan’s maximum sustained winds Thursday afternoon were near 45 mph, with some fluctuations in intensity possible before the expected late-night landfall near Galveston, the National Hurricane Center said. Ivan was weakening slightly as it trudged along at around 8 mph on a northwesterly tracking about 30 miles southeast of Cameron, LA at 4 p.m. CDT, the NHC said.

A producer said moderate softness in all areas was likely Friday as weather load remains low virtually everywhere and the market reacts to a nickel-plus screen loss and the Energy Information Administration’s storage report Thursday morning. EIA said 68 Bcf was injected last week. The report matched up well with analysts’ prior estimations, the producer noted, but “I think cash traders are seeing it as bearish because they thought the volume should have been lower due to the Gulf of Mexico production shut-ins last week.”

The producer added that there no reports of new shut-ins, saying, “I heard rumors of some this morning, but nothing has come of them.” Offshore platforms can handle the winds of 40-50 mph that Ivan seemed to be packing, he said, and it appeared that the storm’s main effect would be “dumping a lot of rain” in the Houston area. He said his company had seen some fairly good power generation load around Texas for the last week or so, but that was dwindling now.

A gas buyer for a Northeast utility also was not hearing from any suppliers about more Ivan-related shut-ins. Undoubtedly the producers will keep workers inside as much as possible, but don’t plan to cut flows, he said. “We had been having some fairly sizeable supply cuts” in the immediate aftermath of the storm’s landfall last week, but none were in effect now, the buyer went on. “We’re getting our full nominations.” He remarked that with area temperatures in the low 80s, it seemed more like summer than the beginning of autumn.

Some demand destruction in the form of power outages may be in store by late this weekend with Hurricane Jeanne expected to invade Florida and/or other parts of the Southeast. Hurricane Karl and Tropical Storm Lisa are not expected to approach the U.S.

An excess of supply coupled with light market-area weather demand caused most of Thursday’s softness to be concentrated in the Midcontinent and West. Although PG&E did not issue an OFO for Friday, one for Saturday is a distinct possibility as the utility projected system linepack rising above its maximum target levels over the weekend.

An eastern utility buyer said his purchases had been substantially reduced by implementation of FERC’s Order 2004. “We’re prohibited from making off-system sales” unless his division gets reorganized as a marketing affiliate, which may happen in the future, he said.

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