Boston/San Francisco: Tropical Storm Nate, which has already forced oil platforms in the Gulf of Mexico shut and sent commodities prices rallying, continued its trek north on a path that’ll bring it ashore in the US by week’s end.
Nate was about 45 miles (72 kilometers) south of Puerto Lempira, Honduras, with top winds of 40 miles an hour, the US National Hurricane Center said an advisory at 8pm New York time. The storm’s latest forecast track has it scraping the eastern edge of Mexico’s Yucatan Peninsula before becoming a hurricane south of Louisiana on Sunday. Nate may come ashore anywhere from Louisiana to Florida’s Panhandle.
Fourteen storms have already formed across the Atlantic so far this hurricane season, killing hundreds of people in the US, Mexico and the Caribbean and causing an estimated $300 billion in damage. In August, Hurricane Harvey temporarily shut down about 25% of oil and natural gas production in the Gulf and as much as 20% of US refining capacity. A few weeks later, Hurricane Irma devastated Florida citrus groves.
Nate is set to roil commodities markets once again by halting oil and gas output in the Gulf and threatening orange and cotton crops. Oil and orange-juice futures were already rallying. Energy explorers from BP Plc to Chevron Corp. were evacuating and shutting platforms on Thursday ahead of its arrival.
“The threat of direct impacts from wind, storm surge, and heavy rainfall is increasing," the hurricane center said late Thursday. “A hurricane watch and storm surge watch will likely be issued for portions of the northern Gulf Coast tonight or Friday morning."
As of 8 pm on Thursday, a tropical storm warning is in place along the coast of Honduras and a stretch of Mexico. A hurricane watch has been issued for Punta Herrero to Rio Lagartos in Mexico.
Nate has already triggered flooding and landslides in Central America, leaving at least 17 people dead in Costa Rica and Nicaragua, based on government estimates. Costa Rica declared a national emergency on Thursday, suspending classes and urging people to stay home. Honduras began stocking shelters.
While energy production may be curtailed, the storm probably won’t be strong enough to do any lasting damage, Matt Rogers, president of the Commodity Weather Group LLC in Bethesda, Maryland, said earlier on Thursday. “The track looks a little ominous, but the intensity is under-performing. That is the reason why we may not get big problems out of this," he said.
Offshore rigs and platforms in the Gulf of Mexico account for about 17% of US crude oil output and 4% of gas production. Roughly 45% of petroleum refining capacity and 51% of gas processing is along the coastline.
Depending on where Nate ultimately comes ashore, it could mean trouble for citrus farmers in Florida, the world’s second-largest orange juice producer, still reeling from Hurricane Irma last month. Orange juice futures extended gains on Thursday.
The system “definitely" poses a risk to US cotton-growing areas, particularly western portions of the Southeast including Alabama and Georgia, Donald Keeney, senior meteorologist with MDA Weather Services in Gaithersburg, Maryland, said in a phone interview. Georgia is the second-largest cotton producer after Texas. Bloomberg