Most points kept falling Wednesday due to a prior-day screen plunge of 68.2 cents and unseasonably moderate weather continuing to prevail in many areas. Another bearish factor was the growing perception that Hurricane Gustav caused little significant damage to Gulf Coast infrastructure — either offshore or onshore — and restoration of shut-in Gulf of Mexico (GOM) production was under way and could be expected to ramp up fairly quickly.

A few scattered flat to higher numbers, primarily dollar-plus rebounds in the Rockies, bucked the overall softening trend. Wednesday’s losses ranging from a couple of pennies to about $3.55 were considerably smaller than those a day earlier in most cases.

The largest declines by far were at Florida Gas Zone 2 (down a little more than 90 cents), Florida Gas Zone 3 (about $1.50) and the Florida citygate (about $3.55); otherwise, losses peaked at nearly 60 cents. Florida Gas Transmission ended an Overage Alert Day Wednesday that had been in effect for nearly two full weeks (see Transportation Notes).

Offshore gas shut-ins that had been running slightly above 7 Bcf/d Tuesday were down to 6,777 MMcf/d Wednesday, according to Minerals Management Service. The pace of resuming production was expected to quicken as companies finish assessing storm impacts to their facilities. Oil shut-ins and the numbers of evacuated platforms and mobile drilling rigs were also dwindling (see related story).

The key barrier to restoring GOM gas flows appears to be the lack of retail electric service at many of the Louisiana coastal-area processing plants. Gov. Bobby Jindal urged Entergy, the chief power provider in South Louisiana, to hurry up and offered the help of National Guard troops in clearing debris.

Most of the pipelines with offshore links or laterals had essentially the same message: they will resume scheduling offshore receipt points on an expedited basis, but only if flowing supplies can be confirmed. In some cases the resumption of operations at onshore processing plants is also a factor.

Henry Hub resumed trading Wednesday, averaging in the mid $7.20s, after having been idle Tuesday due to an operational shutdown Sunday by operator Sabine Pipe Line in advance of the arrival of Hurricane Gustav. The hub had averaged about a dollar higher at $8.23 Friday. NGPL’s Louisiana Line also was being traded again Wednesday after a Tuesday hiatus.

The Rockies plunges on Tuesday had been due to the double whammy of Rockies Express beginning a big outage the next day while a major Wyoming Interstate Co. (WIC) constraint had one more day to run, said Mark Chung, Rockies analyst with Bentek Energy. The WIC outage from Opal to Cheyenne Hub had been curtailing about 700 MMcf/d, Chung said, but that capacity opening up again Thursday allowed the Rockies to rebound. The regional market may have gotten a slight extra boost from a warming trend continuing Thursday that will take Denver highs into the low 80s, he added, but generally the Rockies will remain pretty mild.

The remnants of Tropical Depression Gustav were nearly stationary over southwestern Arkansas for much of Wednesday as heavy rains spread into the mid-Mississippi Valley, the National Hurricane Center (NHC) said. An increase in forward speed and a gradual turn toward the northeast could have the system entering the Lower Midwest by Friday.

Tropical Storm Hanna was looking more and more like a nonevent for GOM operators. NHC had moved its projected landfall farther up the East Coast to sometime early Saturday in central North Carolina, where the storm could begin to suppress Mid-Atlantic cooling load as it moves to the north over land.

Although NHC’s projected tracking for Ike, which developed into a hurricane Wednesday, had it moving through the southern Bahamas next Monday morning still aimed at shooting the gap between Cuba and the Florida Keys, a turn toward the northwest is expected to begin about that point that would carry Ike up the East Coast — much like predecessor Hanna.

Tropical Storm Josephine was weakening and still remote at about 375 miles west of the southernmost Cape Verde Islands late Wednesday afternoon.

The Northern Natural Gas bulletin board indicated that virtually no cooling load remains in much of the Upper Midwest. The normal system weighted temperature at this time of year is 66 degrees, a posting said, but averages were expected to be 60 Wednesday, 58 Thursday, 60 again Friday and 61 Saturday.

Barclays Capital research analysts Michael Zenker and George Hopley said they expect a storage injection of 94 Bcf to be reported for the week ending Aug. 29. Daniel Guertin and Ed Morse of Lehman Brothers had a significantly lower forecast of a 86 Bcf addition.

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