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.
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Futures Higher on Storage, Hurricane Isidore; But Profit-Taking Possible Ahead of Weekend
A 69 Bcf weekly storage injection and a rapidly strengthening tropical storm rumbling toward the Gulf of Mexico were enough to send natural gas futures higher Thursday morning as traders loaded up on long positions. The October contract gapped higher for the second session in a row and peaked at $3.97 moments after traders learned that the storage increase last week fell slightly short of expectations, the prior week’s injection and the injection reported during the same week last year. At 11 a.m. EDT, the October contract was 11.3 cents higher on the day at $3.90. It closed 6.9 cents higher at $3.856.
Quiet Trade on Friday Could be Sign of Things to Come
Despite the bullish double whammy of rising crude prices and the development of a tropical wave in the Atlantic, natural gas futures remained extremely quiet Friday, as traders elected to wait until a clearer fundamental and technical picture develops. With that the November contract spent a second straight day moving sideways, slipping 0.9 cents at the close to finish at $2.244. November crude oil, meanwhile, tracked 69 cents higher to close at $23.43.
Transportation Notes
Saying its overall linepack was low because Tropical Storm Barry had “significantly affected receipt gas” and market area demand was strong, Florida Gas Transmission issued an Overage Alert Day for Monday’s gas day with a 10% tolerance for negative daily imbalances.
Transportation Notes
Due to the uncertainty posed by Tropical Storm Barry, Tennessee has delayed the start of a 500 Line outage until Tuesday. The work previously was set to begin today (see Daily GPI, Aug. 3).
Storms, Options Exert Bearish Influence on Futures
Feeding off Wednesday’s weakness and reflecting fading concernsthat any of the three tropical systems would reach the gas-richGulf of Mexico, the futures market tumbled lower yesterday as bothcommercial and speculative traders exited long positions. Theresultant price slide left the September contract just penniesabove its $2.90 low for the week and turned several bulls intoshort-term bears. The prompt month finished 8.2 cents lower at$2.948 shortly after notching a $2.93 low late in the session.
Hype or Not, Prices Continue Rising Into Weekend
Arguments likely raged all day Friday over whether the gasmarket was overreacting to Tropical Storm Bret or not. But as evena member of the “overhyped” camp reluctantly conceded, there was nodenying that cash prices ignored mild northern market-area weatherand the usual drop in weekend load to achieve gains of up to adime. The smallest showings of flat to only about a nickel highercame at western points, which are more insulated from potentiallosses of Gulf of Mexico production.
Prices Get No Support From ‘Hurricane Hype’
Despite achieving named tropical storm status Wednesdayafternoon, Frances was unable to avert a slight softening of cashprices. Several Gulf Coast pipelines were losing supplies toshut-ins, but the volumes were on a significantly smaller scalethan those attributed to Hurricane Earl last week.