Hurricane Dennis moved through the Gulf of Mexico very quickly, causing little damage. Nevertheless, many oil and gas platforms were evacuated, resulting in lost production. Minerals Management Service reports that about 23 Bcf of gas was shut in as a result of Dennis last weekend. In addition, some liquefied natural gas shipments may have been delayed. The gas market responded by boosting prices another 40 cents as the August contract closed yesterday at $7.84/ MMBtu. I thought the gas price would fall yesterday after USEIA reported a robust gas storage build for the week ending July 8 and the price of oil dropped by more than $2/bbl. Yet gas prices hardly budged yesterday. Gas storage levels remain 200 Bcf above the five-year average, but futures prices for the next 12 months now average an impressive $8.25/MMBtu. Evidently the market jitters I commented on last week have not disappeared, perhaps because Emily has now become a category 2 hurricane headed toward the Gulf. Weather experts had predicted an active hurricane season, and the market appears to have taken Cindy, Dennis, and Emily as evidence that the prediction is correct and more gas production will be shut in before the season is over. On the basis of the weather alone, however, the gas market seems to be overreacting. The 23 Bcf lost because of Dennis amounts to only about eight hours of average U.S. gas consumption, and more than 30 days’ worth of gas is sitting in storage. Those don’t seem like reasons for prices to increase by 5 percent. My guess is that buyers are worried about supplies in general—U.S. production declines, limited supplies from Canada, LNG controversies, etc.—and don’t need much bad news to push the price up.