Tropical Storm Cindy emerged in the Gulf of Mexico with top winds of 45 miles (72 kilometers) per hour. So far, disruptions to oil and gas operations have been limited.
The storm prompted watches and warnings along the Texas-Louisiana coast including Galveston Bay, the entrance to the Houston Ship Channel, and Sabine Pass, the site of the only active liquefied natural gas export terminal in the lower 48 states. Storms in the Gulf can often roil energy markets because its offshore rigs and platforms account for about 17 percent of U.S. crude oil output and 4.1 percent of gas production.
“While the storm may not be a whopper, it will influence shipping and may impact imports and exports of oil for next week,” wrote Phil Flynn, a senior market analyst at Price Futures Group Inc. in Chicago.
Enbridge Inc. evacuated non-essential workers from two platforms in the Gulf. Royal Dutch Shell Plc suspended “some well operations” in the region though production is currently unaffected, according to company spokesman Curtis Smith. The Midcontinent Independent System Operator Inc. declared a severe weather alert for the southern part of its electric grid, including Louisiana and Mississippi.
It’s been a year since the U.S. Gulf Coast took a hit. Tropical Storm Colin and Hurricane Hermine hit Florida last year. The last storm to hit the western Gulf was Tropical Storm Bill in June 2015.
Power outages caused by the storm and subsequent flooding may have the largest market impact. “It’s essentially a demand destroyer for the Deep South,” said Matt Rogers, president of the Commodity Weather Group LLC in Bethesda, Maryland. “No production concerns really.”
Cindy could bring 6 to 9 inches (15 to 23 centimeters) of rain across parts of Louisiana, Mississippi, Alabama and Florida, with some areas getting as much as 12 inches, the U.S. National Hurricane Center said in a 2 p.m. New York time advisory. Lesser amounts are forecast in Texas.
Cindy’s winds should start reaching the New Orleans area just before 8 p.m. local time Tuesday and be well inland by 8 a.m. Wednesday, according to the center.