Prices continued to rise by mostly small amounts at a large majority of locations Thursday. There was no support from moderate weather in most regions, and the previous day's prompt-month futures gain of 0.2 cent wasn't much of a cash market booster. But the acceleration of Atlantic tropical activity -- including Tropical Storm Nate possibly entering the Gulf of Mexico (GOM) production area -- undoubtedly weighed on traders' minds.
A few losses ranging from a couple of pennies to a little more than 20 cents ran against the overall market grain. Otherwise, quotes were flat to nearly a dime higher.
Low-end Tennessee Zone 4 quotes continued to tumble to slightly less than a dollar, but as noted previously (see Daily GPI, Sept. 8), numbers had gotten even weaker in mid-April 2009. Other than the continuing shortfall in Zone 4's Line 300 takeaway capacity for burgeoning Marcellus Shale production, the reason for the further price drop there was unclear since an outage of the Stagecoach Storage facility was scheduled to end after Thursday.
An Energy Information Administration report of a 64 Bcf net injection into storage for the week ending Sept. 2 slightly exceeded consensus expectations in the low 60s Bcf. Nevertheless, Nymex traders were in a bullish mood, possibly because of the potential for another tropical storm disruption of offshore production, and sent October futures higher by 4 cents (see related story).
The return of shut-in Gulf of Mexico production from Tropical Storm Lee continued. The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) said offline gas output fell to 362.8 MMcf/d Thursday, or 6.8% of normal, based on reports from 36 companies received by 11:30 a.m. CDT. Shut-in oil dropped to 206,681 b/d (14.8% of normal), while the tally of evacuated production platforms and mobile drilling rigs shrank to five and two, respectively, BOEM said.
Tropical Storm Nate, designated late Wednesday afternoon, appeared more likely Thursday to head into South Texas instead of following the Tropical Storm Lee path into central Louisiana as anticipated previously.
Hurricane Katia was weakening slightly Thursday, the National Hurricane Center said, as it continued to project a turn toward the northeast that would keep it far off the East Coast. Tropical Storm Maria was becoming more of a puzzle; previously projected as following Katia's course, it was expected Thursday to move northwestward into the Bahamas and from there whether it would trek up the East Coast or thread its way between Cuba and the southern end of Florida into the Gulf of Mexico was anybody's guess.
The National Weather Service's forecast for Sept. 13-17 called for above-normal temperatures in nearly all of the western half of the U.S., along with below-normal readings from Mississippi and Alabama northward into the eastern Midwest and southeastern Northeast.
Despite the end of the Stagecoach Storage outage, Tennessee did not announce a cancellation of a Zone 4 Imbalance Warning.
Gulf South said repairs of Tropical Storm Lee-related damage at the Burns Point Processing Plant in South Louisiana, and also at the Enterprise Plant, were progressing, and it anticipated flows resuming at the affected locations Friday.
The October futures close at $3.980 left it at virtual parity with Henry Hub spot price numbers.
A Midwest utility buyer said her company had practically no immediate-burn load left any more after power generators quit buying gas with area highs shrinking into the mid 70s at most. It's "slow and steady" for now, with storage refill purchases constituting nearly all of the utility's daily trading, she said.
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