Undeterred by the potential threat of two powerful storm systems entering the Gulf of Mexico (GOM) over the weekend, natural gas futures traders on Friday hammered the December futures contract lower for much of the regular trading session. The prompt-month contract reached a low of $4.555 on the day before closing at $4.595, down 18.7 cents from Thursday’s close and 45 cents below the previous week’s finish.

An afterthought for the entire summer and most of the fall, the 2009 Atlantic hurricane season looks like it is attempting to end with a bang as two storm systems in the tropics are threatening to at least disrupt oil and natural gas production in the GOM over the weekend, according to AccuWeather.com.

The forecaster reported Friday that two storms stirring up GOM weather will affect the production of the energy industry beginning Saturday and continuing into Monday. Tropical Storm Ida is expected to move north and be in the GOM by Monday, while a second storm located in the southern Gulf may have become a tropical system during the last weekend as well.

AccuWeather.com said the system currently developing in the southern GOM, whether eventually a named storm or not, would cause strong winds and high seas along the Texas and Louisiana coastlines the weekend.

“This is going to be a three-day problem at the least,” said AccuWeather.com Expert Senior Meteorologist and Tropical Long-Range Forecaster Joe Bastardi. “Seas [of] 15-20 feet and a 200-mile-wide area of strong gale-force winds 40 to 50 mph will mean a likely disruption of normal oil production operations in the northwest Gulf this weekend.”

Ida was forecast to move into the warm waters of the northwest Caribbean over the weekend, where strengthening could occur. Ida could be in the GOM north of the Yucatan Peninsula by Monday.

“This is a complex and very rare weather event for the Gulf of Mexico, and not only has implications on normal oil operations but also on folks living along the Gulf Coast and Florida next week,” the forecasting firm said.

“The tropical storm concerns are probably why I’m hearing the cash market was higher [Friday] morning,” said Tom Saal, a broker with Hencorp Futures LC. “However, we’re also running into the weekend, which historically has lower gas demand. The storm news could be being mitigated a bit by weekend low-load concerns.”

Saal said natural gas futures traders digested the storm news a little differently Friday. “The futures market likely wants to see whether there is damage or not before it makes a move. As of right now we’re not hearing much about storm concerns.”

In the near term, some traders see the market as unable to discount expected milder temperatures and factor in seasonal temperatures and usage. “Fundamentally, this price weakness is still being accommodated by warm temperature patterns that are currently moving in to the Midwest and are likely to be sustained through much of the coming week,” said Jim Ritterbusch of Ritterbusch and Associates. He noted that the last week in November may provide colder, more winter-like temperatures, but “this market appears to be demanding some evidence of a sustained cold spell prior to posting a significant price advance.”

Bullish traders were not pleased with the 8:30 a.m. EST release of October employment data by the Labor Department, which showed greater job losses than expected. September nonfarm payroll losses tallied 263,000 for September. Expectations prior to the report were that October figures would show losses “improved” to 175,000, the fewest since August 2008, according to a Bloomberg survey of 84 economists. The actual figure came in at a disappointing 190,000 jobs lost. The unemployment rate was forecast to have risen to 9.9% from September’s 9.8%, but the October unemployment rate jumped to 10.2%.

“Futures did appear to start selling off once the unemployment numbers came out because they were higher than expected,” Saal said. “Of all of the fundamental indicators, I’ve always said the economy and the weather are the two biggest. The jobs report shows we still have a recession.”

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