Tropical Storm Frances stuck around last week in the Gulf ofMexico longer than Hurricane Earl had the week before, but hermarket impact was just as fleeting. At first some people didn’taccord Frances much importance at all, as prices softened slightlyWednesday even while Frances was strengthening to named tropicalstorm status. A Houston marketer practically sneered in dismissingit as a “rain storm” that would be short-lived. Price impact wouldbe light because “there is not that much production down that far”off the southern tip of Texas, where Frances staked out a positionand stayed there for almost three days.

However, such doubters were being won over Thursday as it becameobvious Frances was causing significant production shut-ins alongthe Texas and Louisiana coasts. It was the disorganized nature ofthe storm that spread its influence as far east as New Orleans,which experienced significant flooding. Cash numbers were risingaround a dime or more at many points as a dime-plus Nymex screenrun-up helped pull up prices in areas not affected by the stormoutages. However, those increases fell far shy of the ones of aquarter or more generated by Earl on Sept. 1.

But just as Earl’s spikes fell by the wayside after just one dayof firming, so did those of Frances. Although NGI was able to comeup with a seriously understated production outage figure of morethan 2.6 Bcf/d as of Friday morning, new prices in eastern marketswere flat to down a nickel or so. (The outage figure was incompletebecause volumes for several pipes were either unavailable or thepipeline representatives in downtown Houston were unable to get towork due to heavy street flooding.) “Everyone was dispatching[nominating] for the weekend as if production would be back up overthe weekend,” a Gulf Coast marketer said. However, he predictedmany would be coming back today facing big imbalances.

Roger Tanner, Houston

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