To no one’s surprise, prices extended their losing streak since midweek into the weekend with across-the-board declines. Below normal temperatures in most areas outside the West Coast and Southwest, storage-related futures weakness the day before, and the continuing recovery of Gulf of Mexico production from storm shut-ins made Friday’s softening a foregone conclusion, sources said.

In a range of drops from a little less than a dime to a little more than 35 cents, Louisiana points tended to take most of the hits of 20 cents or more.

Although Questar had slipped slightly below $5 in low-end quotes Thursday, the other Rockies pipes and San Juan Basin also were recording sub-$5 numbers Friday and some were averaging in the $4.90s, with Questar slipping into the mid $4.70s. Western load fell as the heat that had challenged California’s electric grid with a couple of new record sendouts earlier in the week yielded to more comfortable weather in the Golden State.

Hurricane Charley came ashore around 4 p.m. EDT at North Captiva Island on Florida’s west coast after having strengthened into a Category 4 storm (winds of 131-155 mph) earlier that afternoon. As if to allay any remaining fears that it could still target the Gulf’s offshore platforms, Charley instead took a jog eastward to make landfall in the Fort Myers-Port Charlotte area instead of in the Tampa Bay vicinity to the north as previously expected.

The amount of shut-in Gulf of Mexico production continued to dwindle, but not as rapidly as the day before. Minerals Management Service, in its final compilation of Bonnie/Charley-related statistics, said a survey of 10 companies revealed that as of 10 a.m. CDT Friday 910.26 MMcf/d remained offline. That was a cut of only about 200 MMcf/d from Thursday’s report, in which MMS had calculated a shut-in drop of nearly 1 Bcf/d from the day before. The great bulk (835.08 MMcf/d) of remaining outages came in producers’ reports to MMS’ easternmost New Orleans district office. The rest of Friday’s reports “confirmed that all other locations were remanned and online,” the federal agency said.

A Gulf Coast producer noted that last week’s offshore outages would have been much worse if Bonnie and Charley had traded positions, with the super-powerful hurricane replacing a mere tropical storm as the one to brush by the gas fields. Looking ahead, he said “lousy demand in the Northeast” due to cool weather is likely to last well into this week and maybe longer. However, prices started out “real weak” Friday, but rose during the morning to end near their highs in unusually large trading ranges, the producer said.

He was not sure if the natural gas screen, with an uptick of 9.1 cents despite bearish fundamentals, was trying to reconnect with crude futures. September crude dazzled once again with another foray into heretofore unknown territory, jumping by more than a dollar to a new all-time peak settlement of $46.58/bbl. It was a classic case of traders not wanting to go home for a weekend in short positions with multiple possibilities of supply disruptions hanging in the balance, the producer said. However, he suspected that gas futures could have been influenced more by “a little hype” from the formation of Tropical Depression Four (TD4), even though it was still on the other side of the Atlantic near Cape Verde Islands.

Indeed, while TD4 was about 240 miles south of the islands at 5 p.m. AST Friday, it was getting better organized and could become a tropical storm that night, according to the National Hurricane Center (NHC). It was moving to the west at nearly 15 mph.

But wait a minute. The producer wasn’t aware of it at the time, but Tropical Depression Five (TD5) developed later in the afternoon, and it was closer at hand to the Americas. TD5’s center was 1,045 miles east-southeast of the Windward Islands (the lower half of the Lesser Antilles chain between Puerto Rico and Venezuela) at 5 p.m. AST Friday, NHC said, and its westerly pace of nearly 20 mph could require a storm watch for portions of the Lesser Antilles by Saturday morning. There was a possibility of TD5 becoming a tropical storm sometime Saturday before entering the eastern Caribbean.

Meanwhile, far removed from all the “hurricane hoopla” in the Midwest, a utility’s fuel buyer said it was “about as ho-hum a market as you can get.”Temperatures are about 15 degrees below normal, which is comfortable in mid-August. “But boy, we’d be in a world of hurt if it got 15 degrees below normal in January,” he remarked. He wasn’t sure if recent nighttime lows in the high 40s had any residents turning on their heaters, but said any load increase by the utility was imperceptible if they were.

A utility buyer in northwest Florida said her company was far enough away from Charley’s presumed path to expect not much other than a lot of rain. “At least we don’t have to worry about those 145 mph winds,” she said. Other than Bonnie and Charley’s rains cooling off the state enough for Florida Gas Transmission to lift an Overage Alert Day notice, “the market is quiet here,” she added.

Following up on Thursday’s storage report, Thomas Driscoll of Lehman Brothers commented that injections have exceeded five-year averages by about 1.35 Bcf/d over the past eight weeks (after adjusting for weather). “With storage levels more than 100 Bcf above five-year averages, this could lead to further softening in near-term prices. We believe that residual fuel prices put a $5 floor under gas prices currently — but a sharp drop in oil prices would lower that floor.”

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