Tropical

Partly as a result of Tropical Storm Ida impacting some receipt points on its system, Florida Gas Transmission issued an Overage Alert Day for market-area customers Monday, noting that linepack was low and highs in the mid 80s were forecast for Florida. The tolerance for negative daily imbalances was set at 15%.

Due to Tropical Storm Gustav, Destin Pipeline said effective with the start of Saturday’s gas day it will be unable to provide transportation services from offshore receipt points. This will be a force majeure event, Destin said, adding that its onshore receipt and delivery points will remain in operation.

Tennessee said it was allowing all production behind the Grand Chenier and Sabine processing plants that had been ordered to shut in Monday due to Tropical Storm Edouard to resume flows Wednesday.

With the dress rehearsal of Tropical Storm Erin bringing some Gulf of Mexico evacuations and drenching rains to the Gulf Coast, oil and natural gas producers on Friday were bracing for the real thing to impact early next week as Hurricane Dean continued to strengthen in the eastern Caribbean.

With the dress rehearsal of Tropical Storm Erin bringing some Gulf of Mexico evacuations and drenching rains to the Gulf Coast, oil and natural gas producers on Friday were bracing for the real thing to impact early next week as Hurricane Dean continued to strengthen in the eastern Caribbean.

The cash market finally bowed — but not totally — to the reality of weak weather fundamentals and the steadily diminishing possibility of Tropical Storm Florence even reaching North America, much less the Gulf of Mexico. Although a majority of points recorded moderate losses Thursday, there were still quite a few that were flat to a dime higher.

Despite the moderating tropical weather picture, Raymond James analyst J. Marshall Adkins said the natural gas bulls have room to roam if the BTU-parity price ratio between natural gas and oil is a valid indicator. The analyst is expecting a full-year 2006 price of $7.54/MMBtu and a full-year 2007 price of $10/MMBtu.

A tropical storm now forming in the Atlantic Basin is “a storm with the potential we are really looking out for,” a Wood Mackenzie energy analyst said Wednesday. If the developing storm becomes the next hurricane, to be named Ernesto, “it has a much more favorable pathway to affect Gulf of Mexico (GOM) production” and “could turn into a threat by the end of this week potentially,” said Eugene Kim, Wood Mac’s senior analyst for North American natural gas research.

Lack of above-normal temperatures and tropical disturbance development tied with weakness in the petroleum arena allowed natural gas futures on Monday to continue to explore the downside. After reaching a low of $6.710, September natural gas wound up staging a minor rally in closing out the day at $6.913, still down 35.6 cents from Friday.