Normally a tropical storm aimed at the Gulf of Mexico (GOM) production area is a bullish development, but traders seemed to pay it and forecasts of Southern highs in the 100-degree area little heed as most prices were slightly softer Friday.
The previous day's 13-cent increase by August futures apparently also carried little weight in the cash market, but the usual weekend drop of industrial load may have played a role in the general price weakness.
Most locations fell between 2 and 3 cents and about a dime, while a minority of them were flat to up about a dime. The Rockies and California tended to see most of the larger losses.
Tropical Depression 3 was upgraded overnight to Tropical Storm Bonnie, becoming the Atlantic hurricane season's second named storm of 2010. But late Friday afternoon the National Hurricane Center (NHC) said Bonnie had weakened into a tropical depression again after passing through the southern tip of Florida. NHC projected the system as entering the southeast Louisiana-southern Mississippi area around late Saturday afternoon.
The downgrade of storm status likely was the cause of a fairly casual attitude among offshore producers. Anadarko, Apache and ExxonMobil joined the ranks of producers announcing evacuations of offshore personnel, but only Apache said it had shut in about 6.7 MMcf/d of production.
The Bureau of Ocean Energy Management, Regulation and Enforcement said 13 companies had reported 667 MMcf/d of shut-in gas output, or 10.42% of normal GOM production, to it by 11:30 a.m CDT. Eleven platforms and two mobile drilling rigs had been evacuated, the agency said.
Gulfstream Natural Gas, which extends from Alabama's Mobile Bay area into the western coast of Florida, said Friday it had been impacted by a reduction of flowing gas from offshore locations, and thus issued an Action Alert to protect system integrity. However, a spokeswoman of affiliated Transco said the pipeline had not yet experienced any shut-in supply cuts.
Monday's cash market with have modestly negative screen guidance after August futures fell 6.3 cents (see related story).
Despite the heat wave in the South, Midwest and Northeast highs were destined to retreat into the 80s Saturday after a brief sojourn into the lower 90s. The Rockies were also destined to rejoin the overall West (outside the desert Southwest) in a general moderation of temperatures.
PG&E extended a high-inventory OFO through at least Saturday, which resulted in declines between a nickel and a dime at the PG&E citygate and Malin, according to IntercontinentalExchange (ICE).
Prices into Columbia Gas were flat, but ICE said volumes traded on its platform shrank from 998,500 MMBtu Thursday to 866,200 MMBtu Friday.
Gulf Coast prices tended to hold up a bit more firmly than most of the market, a marketer said, because Destin Pipeline had declared a force majeure on offshore supplies. "Some of the Florida guys were looking for more gas" as a result, he added, but it was "not a big deal." Prices tended to soften a bit late in the morning, he said.
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