Gasoline and natural gas futures rose and some offshore production was halted as a hurricane warning was posted along a 290-mile stretch from Louisiana to Florida. Isaac was about 360 miles (579 kilometers) south of mouth of the Mississippi River with top winds of 65 miles per hour and moving west-northwest at 14 mph, the National Hurricane Center said in an advisory at 8 a.m. East Coast time.
“It looks like it hasn’t done a whole lot overnight,” said Matt Rogers, president of Commodity Weather Group LLC in Bethesda, Maryland. “The key is going to be tonight and tomorrow, and that may be the time for some potential rapid development.”
Gasoline advanced 2.8 percent on the New York Mercantile Exchange as of 9:07 a.m. and natural gas climbed 1.3 percent. The storm shut 24 percent of U.S. Gulf oil production and 8.2 percent of Gulf natural gas output, the Bureau of Safety and Environmental Enforcement said yesterday. The region is home to 23 percent of U.S. oil production, 7 percent of natural gas and 44 percent of refining capacity.
The Republican Party’s national convention in Tampa was pushed back a day from its scheduled start today even as Isaac tracked west of earlier forecast paths that indicated it might hug Florida’s western coast.
The storm may go ashore in southeastern Louisiana early Aug. 29 with winds peaking at Category 1 strength of 85 mph to 90 mph, according to the hurricane center. Katrina struck the Gulf Coast on Aug. 29, 2005, causing levees to fail in New Orleans and killing more than 1,800 people.
Isaac won’t have the power of Katrina when it hits, said Jim Rouiller, senior energy meteorologist at Planalytics Inc. in Berwyn, Pennsylvania.
Current hurricane center forecasts call for Isaac to peak at Category 1 strength on the five-step Saffir-Simpson scale. Katrina grew into a Category 5 system, the strongest, and went ashore as a Category 3, according to Weather Underground in Ann Arbor, Michigan.
Isaac will probably cause minimal damage to rigs and platforms as well as onshore refineries and pipelines, Rouiller said.
“Shut-ins are widespread south and east of New Orleans,” he said. “There could be a bullish market reaction this morning. Most should be up and running by Friday morning.”
Andy Lipow, president of Houston-based Lipow Oil Associates LLC, estimated yesterday that the storm may force shutdowns of 12 coastal refineries in Louisiana, Alabama and Mississippi that together account for 16 percent of the nation’s gasoline production capacity.
Phillips 66 (PSX) is temporarily shutting down its 247,000 barrel-a-day Alliance refinery at Belle Chasse, Louisiana, the company said in a statement on its website. The refinery shutdown is expected to be completed today, and non-essential staff have been released from work, the company said. The 239,000 barrel-a-day Lake Charles refinery at Westlake hasn’t been affected by the storm, Phillips 66 said.
Marathon Oil Corp. (MRO) is initiating the shutdown of its Garyville refinery in Louisiana because Isaac, Shane Pochard, communications manager for the company, said in an e-mail today. The plant has the ability to produce 460,000 barrels of oil per day, according to data compiled by Bloomberg.
Companies including BP Plc (BP/), ConocoPhillips and Murphy Oil Corp. were evacuating personnel or halting production at offshore rigs and platforms. The Louisiana Offshore Oil Port, the largest point of entry for crude coming into the U.S., said it planned to suspend offloading tankers today.
Rogers said Isaac has potential to cause damage with storm surge and wave height as it nears the shore. Waves 30 feet high are possible, he said.
The hurricane center said if the surge strikes at high tide, the ocean may rise 6-12 feet above normal across southeastern Louisiana, Mississippi and Alabama. In addition, the storm may bring as much as 18 inches of rain to the area.
Isaac flooded Haiti with heavy rains on its path through the Atlantic and Caribbean and killed at least eight people there, according to the Associated Press.
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