Aug. 5 (Bloomberg) -- The storm Edouard was downgraded to a tropical depression over Texas after sustained maximum wind speeds fell to 35 miles per hour as it moved inland, according to the National Hurricane Center.

The system's winds slowed from 65 miles (105 kilometers) per hour earlier in the day, and the storm was 35 miles north- northeast of Houston, the center said in an advisory on its Web site shortly before 4 p.m. local time.

The storm's organization ``has been degenerating,'' the NHC said in a statement. ``Continued weakening is expected as the cyclone pushes farther inland.''

Crude oil touched a three-month low of $118 a barrel as Edouard left the region's production unscathed. Crude for September delivery fell $2.76, or 2.3 percent, to $118.65 a barrel on the New York Mercantile Exchange.

The storm forced energy producers to idle 12.3 percent of natural-gas production and 6 percent of oil output in the part of the Gulf under U.S. government jurisdiction, according to the Minerals Management Service, part of the Department of the Interior. Companies evacuated 154 production platforms and 9 rigs as a precaution.

Opening Houston Channel

The U.S. Coast Guard has started to open the Houston Ship Channel, which serves the ports in Houston, Texas City and Galveston, according to a Coast Guard statement. The channel was closed yesterday and there are 22 ships waiting to enter and four ready to leave.

The Louisiana Offshore Oil Port, the biggest U.S. oil import terminal, resumed marine operations today after halting them yesterday. The facility has the capacity to receive 1 million barrels of oil a day, or about 10 percent of U.S. imports.

Royal Dutch Shell Plc, Europe's largest oil company by market value, said the storm was no longer a threat and it would start regularly scheduled crew changes for its off-shore facilities, according to spokeswoman Darci Sinclair.

Noble Corp., the third-largest U.S. offshore oil driller, may have crews back on two submersible rigs by tomorrow.

The Johnson Space Center in Houston, which the National Aeronautics and Space Administration uses as mission control for its shuttles, will reopen tomorrow. It closed yesterday as a precaution, according to a NASA statement.

`Inland Flooding'

Edouard may drop 3 inches (7.6 centimeters) to 5 inches of rain along parts of the Gulf Coast in Texas and Louisiana, and isolated maximum amounts of 10 inches are possible over southeastern Texas, according to the hurricane center.

``The largest threat now from Edouard is inland flooding,'' Jeff Masters, director of meteorology at private forecaster Weather Underground Inc., wrote in his blog. ``There is currently some very heavy rain over the Houston area.''

Hurricanes Katrina and Rita, which reached Category 5 with wind speeds of more than 155 mph over the Gulf before hitting land as weaker storms, devastated New Orleans and the U.S. Gulf Coast's oil output and refineries in 2005. Category 5 is the highest on the Saffir-Simpson scale of hurricane intensity.

Forecasters from Colorado State University raised the number of Atlantic storms they expect this year to 17, including nine hurricanes, five of them major.

This year's hurricane season, which ends Dec. 1, should be ``much more active'' than those between 1950 and 2000, researchers Philip Klotzbach and William Gray said in a statement today. The forecasters predicted 15 named storms, including eight hurricanes, in April and June.

To contact the reporter on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net.

Last Updated: August 5, 2008 17:15 EDT