29 August 2008 15:52 [Source: ICIS news]
(updates paragraphs 1-7)
HOUSTON (ICIS news)--Meteorologists expect Tropical Storm Gustav to become a major hurricane by the time it reaches western Cuba, the same ranking that Katrina and Rita reached three years ago before pummelling the Gulf coast, the National Hurricane Center said on Friday.
Meteorologists expect Gustav to reach Lousiana late on Monday as a hurricane, which is categorised as a storm with wind speeds of at least 111 miles/hour (178km/hour) according to the centre.
NYMEX crude oil and natural gas prices gained 2% in early US trading on the news. Much of US oil and natural gas production is in the Gulf, making it vulnerable to disruptions caused by tropical weather.
No refinery shut-ins have been announced, but fears that Gustav could disrupt supply shot crude prices up $2.38/bbl and natural gas prices up 19.2/m Btu cents from the previous close.
As of 7:00 Houston time (12:00 GMT), Gustav had wind speeds of only 65 miles/hour, making it a tropical storm, the centre said.
However, Gustav was still near Jamaica at the time. Meteorologists expect Gustav to remain in water for most of its journey towards Louisiana.
Traders recalled Hurricane Katrina in 2005, which pushed oil prices to record highs and also disrupted petrochemical production in the US and major shipping routes.
Spot benzene in Europe had shot up as much as $180/tonne in the week ending 2 September 2005 on the back of surging oil prices and spot values in the ?xml:namespace>
With as much as 25,000 tonnes of benzene making its way to the
Fertilizer market participants, meanwhile, discussed the “massive disruption” seen in their markets as
One chemical shipping trader said there would be delays in the region but should the hurricane prove to be a category four or five then a repeat of Hurricane Katrina was a possibility.
“We haven’t been advised of anything yet as there is still some time before the hurricane hits the US Gulf but if it is as strong as experts are speculating then it could be a disaster all over again.”
Another chemical shipping broker was concerned of potential disruption to ports in the region.
In 2005, Katrina and Rita destroyed 109 oil platforms and five drilling rigs.
Oil and chemicals companies they were preparing for the possibility that Gustav could hit installations and plants in the next couple of days.
Both hurricanes Katrina and Rita had wind speeds that exceeded 155 miles/hour. They weakened before making landfall at the Gulf coast in 2005.Picture Source: The National Hurricane Center
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