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Weakening Tropical Storm Isaac Eases Gulf Energy Threat

Aug. 30 (Bloomberg) -- Tropical Storm Isaac’s threat to offshore energy production in the Gulf of Mexico eased as the weather system weakened while still dumping rain and producing storm surges over Louisiana. Forecasters expect it to become a tropical depression later today.

Crude prices fell for a second day in New York after Isaac’s landfall reduced concern that the storm would damage platforms and rigs in the Gulf. 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. Six Louisiana refineries were shut, idling at least 6.7 percent of national capacity, according to data compiled by Bloomberg.

“Even though Isaac is no longer a hurricane, life-threatening hazards from storm surge, inland flooding and tornadoes are still occurring,” the National Hurricane Center said early today.

Isaac, which pounding the New Orleans area on the seventh anniversary of Hurricane Katrina, was about 125 miles (201 kilometers) northwest of Louisiana’s largest city as of 7 a.m. local tome with top winds of 45 miles per hour, down from 80 mph at landfall, the NHC said in an advisory. The system was moving northwest at 8 mph.

The center of the storm is forecast to continue to move over Louisiana today, pass through Arkansas tomorrow before continuing inland to southern Missouri later tomorrow.

Crude for October delivery declined 0.3 cents to $95.46 a barrel on the New York Mercantile Exchange as of 7:52 a.m. before the floor opened.

Gulf Energy

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

“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.”

Enbridge Inc. declared force majeure on the Manta Ray and Garden Banks offshore gas pipeline systems because of 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 spokeswoman for the company, said in a message posted on its website. The port’s main Clovelly terminal near Galliano, Louisiana, lost power and was preparing backup generators to allow to partial operations once storm conditions improve, the company said.

Refinery Impact

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

“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 10 feet (3 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 25 inches, the hurricane center said.

“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.

Threat Lingers

Pydynowski said that since the storm is lingering near the coast, it will take some time to weaken. The swampy land of southern Louisiana is full of warm water that can fuel the system, he said.

All hurricane warnings and watches were dropped when Isaac was downgraded. A tropical storm warning is in effect from Cameron, Louisiana, to the Mississippi-Alabama border.

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, was 1,065 miles northeast of the northern Leeward Islands and no threat to land, the hurricane center said in a separate advisory. It had maximum sustained winds of 65 mph and is moving northwest at 10 mph. Kirk could become a hurricane later today or tomorrow, the center said.

Forecasters are also tracking an area of low pressure west of the Cape Verde islands, in the eastern Atlantic Ocean, that has a 90 percent chance of becoming a tropical system within two days.

To contact the reporters on this story: Brian K. Sullivan in Boston at; Rupert Rowling in London at

To contact the editor on this story: Dan Stets at

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