With a long holiday weekend and increasingly moderate weather looming on the immediate horizon, no one was surprised to see across-the-board declines in double digits Thursday for prices through the end of the month. And despite a surprisingly low storage injection report and the late-afternoon emergence of Tropical Storm Fabian, sources expect softening to continue Friday in trading for the initial September aftermarket.

The Energy Information Administration came in below all prior expectations with a report of only 53 Bcf put into storage last week. Admittedly, predicting the number beforehand was more difficult than usual because of the demand complications resulting from the widespread blackout that began on the afternoon of Thursday, Aug. 14. Because EIA makes its weekly assessments on Friday morning, most of the blackout’s impact on gas load — both positive and negative — was incorporated into the most recent report.

September futures had a mildly bullish response to the EIA proclamation, gaining 6.1 cents in their prompt-month debut. But traders felt it would take a lot more than that to counteract the effects of lower demand in a holiday period and cold fronts pushing into the Northeast and Midwest.

Similarly, sources also gave a collective yawn to Tropical Depression 10, which was not upgraded into named storm status until many of them had already left the office. Talking before the upgrade, a Gulf Coast marketer commented, “I can’t see anything to worry about Tropical Depression 10 right now because it’s so far out in the Atlantic. In fact, I don’t see any possible TD hassles until after the holiday, so I’m going to enjoy my day off.”

The center of Fabian, the 2003 Atlantic hurricane season’s sixth tropical storm, was about 1,000 miles west of the southernmost Cape Verde Islands as of 5 p.m. AST Thursday, the National Hurricane Center reported. Like its predecessor Erika, Fabian is a speeder, moving west at nearly 22 mph, although NHC expected a gradual decrease in forward speed over the next 24 hours. Maximum sustained winds were near 45 mph with higher gusts.

Weather 2000 referred to pre-upgrade TD 10 as “one of the many tropical waves we’ve been monitoring coming off the African continent” (see related story). The consulting firm sees potential for Fabian to become more dangerous than earlier storms, noting that it “does not have many obstacles in its path, with several hundred miles of open warm Atlantic waters ahead of it.” Weather 2000 sees “a 40% chance of Gulf of Mexico entry (which includes scenarios of a transverse of Florida and into the northeast Gulf), and a 60% chance of an Atlantic Seaboard encounter.” It added that there are “good prospects for Fabian and a [potential] TD #11 (or Grace) to co-exist sometime over the next five days.”

Florida Gas Transmission was teasing market-area customers with “on-again, off-again” Overage Alert Day notices (see Transportation Notes), said a utility buyer, “but today’s isn’t too bad at 20% tolerance.”

Another eastern utility buyer said it would be tempting to take off Friday in addition to Labor Day on Monday “since today’s [Thursday] deals cleared through the end of August, but we have to come in Friday to do the swing trading for Sept. 1-2.”

Virtually all bidweek business was getting wrapped up Thursday since most traders are expected to come in Friday only for the start of September swing business and then leave for the holiday by early afternoon.

An end-user who sources gas in both the Gulf Coast and Midcontinent said it was a pretty slow bidweek to him, adding, “It seems like the big majors [producers] didn’t have the volumes available that they usually do.” He speculated that could possibly be a factor of the production decline that has been widely reported in the last year or so. The end-user also said it appeared that a major counterparty had switched selling from Elba Island (GA) LNG supplies to the Cove Point (MD) LNG facility instead, which caused some scrambling for September backup gas on Sonat at Elba Island.

Lower September indexes mean prices are still moving favorably in the direction of end-users, he concluded, “but they [prices] are also still high.”

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