Hurricane Isaac Pounds Louisiana as Energy Prices Drop

Hurricane Isaac will linger over Louisiana with heavy wind-driven rain for two days while reducing the threat to offshore energy production.

Crude oil fell in New York after Isaac’s landfall eased concern that the storm would damage platforms and rigs in the Gulf of Mexico.

“In the oil rig areas, the conditions there aren’t going to let up until Friday,” said Jeff Masters, co-founder of Weather Underground in Ann Arbor, Michigan. “The winds over the water are going to be stronger than over the land. They are just going to have to wait. It’s going to be a patience game with this storm.”

Isaac, pounding the New Orleans area on the seventh anniversary of Hurricane Katrina, was 45 miles (72 kilometers) west-southwest of the city at noon local time, the National Hurricane Center said in an advisory. Its top winds were at 75 mph, making it a Category 1 hurricane on the five-step Saffir- Simpson scale.

“It’s moving very slowly, it’s just drifting about the south Louisiana coastline, so they’re just going to get pounded with wind and rain for quite some time now,” said Dan Pydynowski, a meteorologist at AccuWeather Inc. in State College, Pennsylvania. “The areas that are getting hit hard right now will continue to take a pounding through most of the day today.”

Gulf Impact

Isaac has halted 95 percent of U.S. oil production in the Gulf and 72 percent of natural-gas output, the Bureau of Safety and Environmental Enforcement said today. Six Louisiana refineries were shut and three were running at reduced rates, idling 6.7 percent of U.S. capacity, according to data compiled by Bloomberg.

Enbridge Inc. declared force majeure on the Manta Ray and Garden Banks offshore natural gas pipeline systems because of Hurricane Isaac, according to a notice on the company’s website.

The Louisiana Offshore Oil Port suspended all operations from its offshore terminal and onshore storage, Barb Hestermann, a company spokeswoman, said in a message posted on the company’s website as of 10:30 a.m. local time.

Oil Futures

Crude oil for October delivery declined 93 cents, or 1 percent, to $95.38 a barrel at 2:19 p.m. on the New York Mercantile Exchange. Prices also fell after stockpiles rose unexpectedly.

The Gulf region is home to 23 percent of U.S. oil output, 7 percent of natural gas and 44 percent of refining capacity.

Refiners in the area will probably take little damage from the storm, said Jim Rouiller, senior energy meteorologist at Planalytics Inc. in Berwyn, Pennsylvania.

“I believe it’s likely that the remainder of the energy- production infrastructure across the northern Gulf will have little in the way of damage from Isaac and should be up and running by Friday,” Rouiller said.

Isaac unleashed a storm surge into southern Louisiana and Mississippi that is raising sea levels to 12 feet (3.7 meters) above normal. The rising water pushed over the top of a levee in Plaquemines Parish.

Seven to 14 inches of rain may fall and some areas may receive as much as 20 inches, the hurricane center said.

Storm Lingers

Pydynowski said that since the storm is lingering near the coast, it will take some time to weaken. It may retain its hurricane strength for hours because the swampy land of southern Louisiana is full of warm water that can fuel a storm, he said.

A hurricane warning is in effect from Morgan City, Louisiana, to the Mississippi-Alabama line, including New Orleans.

Hurricane Katrina stuck New Orleans and the Gulf Coast on Aug. 29, 2005, swamping the city’s levees and killing more than 1,800 people.

Tropical Storm Kirk, the 11th named Atlantic weather system this year, is 1,220 miles east-northeast of the northern Leeward Islands and no threat to land, the National Hurricane Center said in a separate advisory. It has maximum sustained winds of 45 miles per hour and is moving at 9 miles per hour.

To contact the reporters on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net; Matthew Brown in London at mbrown42@bloomberg.net.

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.