September natural gas is expected to open 2 cents lower Friday morning at $2.93 as traders view the impact of Hurricane Harvey largely as one of limiting demand. Overnight oil markets rose.

The National Hurricane Center (NHC) in its 7 a.m. CST report said a dangerous Hurricane Harvey was up to 110 miles per hour wind speed and located 140 miles southeast of Corpus Christi, TX. It was moving to the northwest at 10 mph, but its forward speed was expected to decrease significantly during the next couple of days. On the forecast track, Harvey will make landfall on the middle Texas coast tonight or early Saturday. Harvey is then likely to meander near or just inland of the middle Texas coast through the weekend.

“Harvey is expected to produce total rain accumulations of 15 to 25 inches and isolated maximum amounts of 35 inches over the middle and upper Texas coast through next Wednesday,” NHC said.

Industry consultant Genscape Inc. reported that Gulf of Mexico (GOM) production dropped 580 MMcf/d, to 2.26 Bcf/d on August 24, from the pre-storm two-week average of 2.84 Bcf/d. The declines are largely due to offshore platform shut-ins causing gathering system receipts at meters on several interstate pipelines to plummet.

Traders see the market working higher, but not so much off the effects of Harvey. Jim Ritterbusch of Ritterbusch and Associates in a morning note to clients noted “the lack of price response to the major hurricane event that has already prompted some staff evacuations off of GOM production platforms. Within the grand scheme of things, GOM gas production loss appears limited thus far and even allowing for some reduced associated gas output within the Texas shale oil fields, it appears that reduced cooling degree day (CDD) accumulation off of the storm is offering a major offset.

“We will also note that yesterday’s Energy Information Administration storage report was right in line with average street guesstimates in giving the market little incentive to move in either direction. Nonetheless, we are viewing the storm as a net bullish consideration that is developing amidst a sharply downsized supply surplus that further reduces the likelihood of a price decline to below our expected support of about 2.85 per nearby futures. While pushing values higher will be challenged by broad based cool temperature expectations that will be stretching well into the second week of September with the weekend updates, we will be looking for the market to ratchet higher next week despite the advanced stage of the CDD cycle.”

In overnight Globex trading October crude oil rose 25 cents to $47.68/bbl and October RBOB gasoline jumped 4 cents to $1.5862/gal. largely on storm threats to Gulf production.