Bonnie and Clyde…er, that is, Tropical Storms Bonnie and Charley were holding up the cash and futures gas markets Tuesday morning as the first reports of Gulf of Mexico production shut-ins began to trickle in. A producer said Gulf Coast prices were jumping by as much as 30 cents or so, while smaller gains were reported elsewhere.

The tropical storms are “the story” of Tuesday’s cash market, the producer said. Henry Hub quotes averaged nearly 20 cents up from Monday and were rising steadily as the morning went on, peaking at more than 30 cents higher in late deals, he said. Other Gulf points were performing similarly, he added.

Florida Gas Transmission Zone 3 led the uprising with an advance of more than 35 cents, while Transco Station 65 and FGT Zone 2 also were particularly strong in rising about 30 cents.

A marketer said Chicago citygates rose 15 cents to around $5.80, while the Midcontinent in general was about a dime higher. Naturally those markets wouldn’t be as directly affected by tropical storms as the Gulf Coast, “and you’ve still got cool weather in the Midwest keeping a lid on prices,” she pointed out.

“Storm hype” was less effective in boosting prices at points even farther removed from the Gulf of Mexico. Most increases in western markets were fairly small at about a nickel or less, while a few points were flat and Sumas even fell slightly. A marketer said although western price hikes were generally small, there was enough weather-related demand there and from intrastate Texas to give Waha/Permian Basin numbers a bigger boost than in the rest of the West.

September natural gas futures got some buoyancy from the storm news and finished up 9.8 cents to $5.791, but that represented a decline of nearly 17 cents from their early top. The crude oil contract saw its first-ever print above $45/bbl ($45.04), but eventually wound up the day down 32 cents to $44.52 as traders got some slightly encouraging news about future supplies.

A marketer said he was told late Tuesday afternoon that “we’re already getting notifications of a few cuts [for Wednesday flow] at Louisiana points,” but he didn’t know if it was first-of-month baseload or swing gas. Florida Gas Transmission seems to be most affected so far, he said. The marketer added that things might get a little messy with Wednesday’s nominations, “but everybody’s been so proud about having healthy storage inventories” that suppliers should be able to replace shut-in gas without too much problem by withdrawing storage.

An intrastate Texas trader reported that his colleague who trades on Louisiana pipes “thinks he’s fine and won’t have any problems” with nominated gas not showing up Wednesday. “But who knows?” the trader mused. “He could be scrambling in the morning.”

Shell Oil was the first big producer to weigh in with an announcement of shutting in 80 MMcf/d of gas and 49,000 bbl/d of oil due to the approach of Bonnie. It also removed 500 “non-essential” platform workers. Another offshore producer said his company had not shut in anything “yet,” but the exploration and production unit in Houston was meeting Tuesday morning to discuss the subject.

The Reuters news service reported that Anadarko Petroleum was removing a rig crew at the Marco Polo field, but the production crew would remain and field output would not be affected. Reuters also said Kerr-McGee evacuated 25 non-essential personnel from its Red Hawk production site but likewise did not plan to suspend production. Red Hawk initiated production last month and was expected to peak around 120 MMcf/d in early August (see Daily GPI, July 20). A Marathon spokesman was quoted as saying the company had shut in 90 MMcf/d and 2,000 bbl/d, but the situation was fluid and could change at any time.

Gulf Coast pipelines with offshore connections were not experiencing any significant shortfalls of scheduled volumes at midday. By the late afternoon, however, Transco reported that about 250 MMcf/d was being shut in upstream of the pipe. A spokeswoman for the Minerals Management Service in New Orleans said the federal agency did not plan to begin reporting on shut-ins until Wednesday morning.

A Tuesday bulletin board posting said Sonat has confirmed that the Main Pass 289 VK [Viosca Knoll] and Mississippi Canyon 194 receipt points would be shut in Wednesday, and that the pipeline “has already received calls from a couple of producers who plan to evacuate starting tomorrow.” A spokesman also said Sonat planned to evacuate the Olga Compressor Station, which is onshore in the delta area of extreme southeastern Louisiana but sits on highly marshy ground.

The center of Bonnie was about 315 miles south-southwest of the mouth of the Mississippi River at 4 p.m. CDT. After moving toward the northwest at nearly 8 mph earlier, it had turned to the north and slowed to 6 mph, according to the National Hurricane Center (NHC). If continued, such a path would take Bonnie into the heart of offshore Louisiana production, but a chart issued by the agency indicated a sharp veer toward the northeast over the next couple of days that would send Bonnie through the eastern periphery of Gulf oil and gas platforms. Bonnie’s maximum sustained winds had weakened a little to near 50 mph, the NHC said, but conditions appeared favorable for some restrengthening. It characterized Bonnie as “very small,” saying tropical storm-force winds extended outward only up to 45 miles from the center.

Meanwhile, Charley was on a west-northwesterly track but scooting along much faster at almost 26 mph in the eastern Caribbean Sea. At 5 p.m. AST its center was about 440 east-southeast of Kingston, Jamaica. Tropical storm warnings had been issued by Jamaica and Haiti, and a watch was in effect for the Cayman Islands. Charley was not only making better time than Bonnie but also much bigger; its tropical storm-force winds of up to about 50 mph extended 105 miles from the center, the NHC said. Charley was expected to be in the eastern Gulf of Mexico by Thursday.

One source joked that the “hurricane namers” must have been out to lunch when they failed to pick “Clyde” as the season’s third named storm to accompany Bonnie.

The National Weather Service (NWS) provides a rather bearish gas price outlook for the Aug. 16-20 workweek. It predicts below normal temperatures from the Rocky Mountains eastward; the only exceptions in this vast area expected to have normal readings are the peninsular part of Florida and much of New Mexico and Texas. NWS anticipates above normal temperatures in the Pacific Coast states and in most of Nevada and Arizona.

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