Prices fell at most points Monday as the industry began picking up the pieces after the passage of Hurricane Ike. Notwithstanding major power outages in coastal areas of southeast Texas and southwest Louisiana and continuing massive shut-ins of offshore production, “it could have been worse” seemed to be the most common perception.

Losses ranged from 2-3 cents to $1.80. Several points, mostly in the Gulf Coast and Northeast, were flat to about 60 cents higher.

The Rockies took the biggest price hits as quotes sank as low as $1.10 at Opal. Opal, Kern River and Northwest-domestic averaged less than $2 as weather-based load remained light and limited takeaway capacity kept regional producers in a bind.

Florida Gas Zone 3 recorded the day’s biggest gain as Florida Gas Transmission had an Overage Alert Day in place Monday with 20% tolerance for negative daily imbalances. The Florida citygate was down about 65 cents, but at an average of about $12 it was by far the most expensive gas in the market, handily surpassing Northeast citygates by at least $3.50.

Henry Hub operator Sabine Pipe Line said that due to the storm surge from Hurricane Ike and intermittent power outages, it declared a force majeure at 9 p.m. CDT Friday and shut down and evacuated all of its facilities, including the hub. No hub trading was reported Monday.

Citing the Henry Hub situation, the IntercontinentalExchange (ICE) on-line trading platform put out this notice: “Notwithstanding the force majeure declared by Sabine…Henry Hub swing swaps available for trading on ICE and cleared at LCH.Clearnet must be properly settled by ICE.”

In the absence of a daily published index, ICE said it “has considered the best information available to it in determining an appropriate Final Settlement Price for Henry Hub swing swaps under the circumstances, and as a result has deemed the nearby Columbia Gulf, LA, hub plus a basis adjustment as the best available surrogate for the Henry Hub price for the Sept. 16, 2008 gas day. Specifically, ICE will use the Platts Gas Daily midpoint for the Columbia Gulf, LA, hub for the Sept. 16th gas day plus a basis of [11 cents]. The basis corresponds to the recent difference in the midpoint prices for Henry Hub and Columbia Gulf, LA, hub.

“Please note, this Final Settlement Price determined by ICE is intended for use only on ICE’s Henry Hub swing swap and is not intended as, and does not represent, a published daily price or index for other purposes.”

According to Minerals Management Service (MMS), Gulf of Mexico production actually rose a bit during the weekend as some operators in the eastern Gulf were able to resume flows (see related story). MMS said 6,942 MMcf/d of gas shut-ins were reported to it Monday, down from 6,985 MMcf/d on Friday. MMS also tallied 1,298,309 b/d of oil shut-ins along with the evacuations of 562 platforms and 82 mobile drilling rigs.

Barclays Capital analysts calculated that the cumulative impact from both Gustav and Ike now amounts to a notable 81.8 Bcf (prior to MMS issuing its Monday statistics report). “While the losses are partially offset by concurrent demand destruction due to power outages and shutdown of industrial facilities, they are nevertheless substantial enough to bring our expectations for end-of-season [storage] inventory levels closer to 3.4 Tcf. Next week’s focus should fall on the aftermath of the storm and rekindled efforts to restore production. Given that Ike’s path passes just to the east of the most densely-developed Gulf of Mexico areas, recovery may take place faster than after Hurricane Gustav. Nevertheless, cumulative curtailment of production may well exceed 120 Bcf — a volume that, while not critical, should not be entirely discounted by the market.”

After a very busy few weeks, for a change the Atlantic tropical scene was quiet. What the National Hurricane Center called “disorganized shower activity” a few hundred miles east of the northern Leeward Islands was considered unlikely to develop.

Northeast citygates may have gotten some support from heating load. The interior portion of the region could expect to see overnight lows in the 30s and 40s Monday and Tuesday nights, according to The Weather Channel.

Ike delivered flooding rains in much of the Midwest after moving on from the Gulf Coast area. The West currently has most of the nation’s higher heat levels.

A Gulf Coast trader in the Dallas-Fort Worth area was disappointed to report that her drought-stricken area got only a little rain from Ike, but at least there wasn’t very much wind either. She had no problem with the Henry Hub outage because her company doesn’t trade there anyway, and she had no trouble with nominations or scheduling on any of the other Gulf Coast pipes. Considering how light weather-based load is in general, she said she expects the cash market to be mostly softer again Tuesday.

NGPL reported that Compressor Stations 342 (Cameron Parish, LA), 346 (Vermilion Parish, LA) 302 (Montgomery County, TX) and 343 (Liberty County, TX) were shut down and are not available for service.

Tennessee lifted a force majeure declaration for Station 32 at Jasper, TX, but said the one for Station 25 at Cleveland, TX, remains in effect until further notice.

Trunkline said its Centerville (TX) Compressor Station was flooded and unavailable, while the Kaplan (LA) Compressor Station would also be unavailable until inspections can be made. “Communication of flow volumes at various receipt and delivery interconnects has been lost,” Trunkline added.

Saying it hadn’t finished investigating its pipeline facilities, offshore infrastructure and third-party processing plants in Louisiana that were in the paths of hurricanes Gustav and Ike, Texas Eastern said it was restricting to zero receipt points on the Cameron System, South Pass Line and Main Pass Line. It estimated that producers had shut in 700,000-800,000 Dth/d of supply on its system.

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