Confused as to what path Hurricane Ivan will take following a number of revised forecasts, October natural gas futures traded tentatively for a majority of the shortened regular session, before taking a significant step lower towards settlement. Futures hit a low on the day of $4.54, a level unseen since November 2003, before settling at $4.57, down 8.8 cents.

The sell-off in the afternoon was attributed to the most recent projection of Ivan’s path, which now has the storm hugging the Western Florida coastline and making landfall in Tallahassee, FL early next week. A handful of Gulf of Mexico producers said Friday that they had evacuated some non-essential personnel from Gulf platforms, but had not shut in any production as of press time. As of Friday evening, Ivan had been downgraded to a Category 4 hurricane.

“Ivan the terrible wasn’t too terrible today for natural gas futures,” a Washington, DC-based broker said. “The latest we have heard is that it looks like the hurricane may make landfall in Florida, north of Tampa, so I guess the thought is if it sort of curves east back into Florida on the Gulf side, that would be away from oil and gas production facilities, thus the afternoon sell-off in natural gas.

“I would tend to think there was some relief there as it appears that this is Ivan’s track,” he added. “However, we are still a long way from knowing for sure. We have at least to days for the hurricane to wobble and change path. Given the fact that we are going into a weekend and the fact that the prompt month sold-off into that, I would assume that people felt pretty confident that, as it stands now, Ivan is not a threat to production.”

The broker noted that the futures market has broken a fairly medium-term uptrend with its most recent move down, which is significant. However, he pointed out that it will be interesting to see what the complex does now that the prompt month is back in the $4.50 support level. “We will have to see whether we will punch through that level or stall out,” he said.

As of 5 p.m. (EDT) Friday, the eye of Ivan was about 80 miles south-southeast of Kingston, Jamaica, moving toward the west-northwest near 13 mph. Sporting 140 mph winds, the hurricane was expected to hit Jamaica late Friday or early Saturday and the Cayman Islands late Saturday.

In observance of Sept. 11, 2001, NYMEX delayed its regular session opening on Friday until 11:00 a.m. (EDT).

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