Tropical

Resuscitated Ivan stirred up the Gulf of Mexico again on Thursday as a tropical storm but lost some strength midday after peaking with 60 mph winds in the morning off of the southwestern coast of Louisiana. However, the second coming of the much more devastating hurricane that destroyed at least seven platforms in the eastern Gulf last week failed to strike fear in the minds of many producers.

Amid diminishing concerns about Tropical Storm Bonnie and Hurricane Charley, the natural gas futures market shuffled lower Wednesday, quickly rescinding nearly all of the gains notched over the previous two trading sessions. The September contract was the biggest loser, dropping 17.7 cents to close at $5.614. By comparison, the out-months fared much better, enabling the five-month winter strip (November-March) to sustain only a modest, 6-cent decline to $6.684.

With one eye on the tropical disturbance in the Caribbean and the other focused on Thursday’s storage report, natural gas futures traders took a wait-and-see approach to the market Wednesday. The result was choppy, sideways-to-lower trading. The September futures contract failed to retest the $5.28 high achieved in the overnight Access trading session Wednesday, paving the way for light long liquidation. It closed at $5.179, down 3.8 cents for the session.

Citing “the forecast potential for Tropical Storm Claudette to enter the Gulf of Mexico this weekend,” Texas Eastern said Wednesday the previously posted shutdown of its Main Pass System’s Line 40-B (see Daily GPI, July 9) has been postponed until July 16; it previously had been set to begin this Sunday. The duration and course of Claudette will dictate whether the schedule gets shifted again, the pipeline said.

Shut-ins from Tropical Storm Isidore and property sales failed to slow down natural gas production for Magnum Hunter Resources Inc., which doubled its quarterly production from 2001. The Irving, TX-based independent reported actual production volumes of 19.8 Bcfe, averaging 215 MMcfe/d, and said its total equivalent production volumes were weighted 67% toward natural gas.

Net quarterly losses were reported by ConocoPhillips, in its first financial report since completing its merger, and Amerada Hess last Thursday, putting downward pressure on major oil shares. Hess shares fell more than 11% to $58.54 by mid afternoon, while ConocoPhillips shares were down only about 2% to $47.20 because the charges were expected and its results from continuing operations were in line with Wall Street forecasts.

While weak shoulder month gas demand minimized the market impact of Hurricane Lili and Tropical Storm Isidore, the two storms did cut substantially volumes of gas and oil production in the Gulf of Mexico and on Friday continued to have an impact, with 670 MMcf/d of gas and 105,000 b/d of crude oil production remaining curtailed, according to the Minerals Management Service.

While weak shoulder month gas demand minimized the market impact of Hurricane Lili and Tropical Storm Isidore, the two storms did cut substantial volumes of gas and oil production in the Gulf of Mexico, and on Friday continued to have an impact, with 670 MMcf/d of gas and 105,000 b/d of crude oil production remaining curtailed, according to the Minerals Management Service (MMS).

Tropical Storm Isidore may not have gained the speed that Hurricane Lili is producing, but it was strong enough to blow a hole into BP plc’s production forecast for 2002. The company, which will still have to tally Lili’s consequences, blamed the September storm for a predicted year-end production growth of 4% over a year ago, which is 1% less than its forecast a month ago.