UpdateGustav makes landfall, weakens slightly

01 September 2008 16:57 [Source: ICIS news]

(Releads and updates throughout)

By Brian Ford

Gustav makes landfall on Louisiana coast - NHC HOUSTON (ICIS news)--The centre of Hurricane Gustav has made landfall near Cocodrie, Louisiana, around 70 miles southwest of New Orleans, US forecasters said on Monday.

Gustav has weakened slightly to a category 2 hurricane but was still packing sustained wind speeds of 110 miles/hour (175km/hour) as it charged up the southeast Louisiana coast, the National Hurricane Centre (NHC) said.

As of 10:00 Houston time (15:00 GMT), the hurricane was continuing to move northwest at around 15 miles/hour (24 km/hour).

The storm has led to hundreds of thousands being evacuated from the coast, including New Orleans which was largely devastated by Hurricane Katrina three years ago.

In total, an estimated 1.9m are thought to have fled further inland.

“An extremely dangerous storm surge of 10-14 feet above normal tidal levels is expected near and to the east of where the centre of Gustav crosses the coast,” said the hurricane centre.

A hurricane warning was in place from just east of High Island, Texas, eastward to the Mississippi/Alabama border.

Crude prices fell by more than $4/bbl to take Brent crude on ICE Futures to below $110/bbl for the first time since early May on the back of a stronger US dollar and the diminishing threat from Gustav.

By 14:25 GMT, October Brent crude had hit a low of $109.20/bbl, a loss of $4.85/bbl from the Friday close of $114.05/bbl, before recovering to around $109.70.

Shipping brokers, however, were predicting large-scale disruption to chemical shipping activity in the region due to the hurricane.

The region's largest offshore producer, Shell Oil, along with fellow producers ExxonMobil and Chevron have shut down their facilities in the Gulf and evacuated workers from the area which accounts for about a quarter of the US’ oil production.

ExxonMobil’s refineries in Baytown and Beaumont, Texas, and in Baton Rouge, Louisiana, were reported to have cut production.

The Mineral Management Service (MMS) on Sunday estimated that around 96.26% of Gulf oil production had been shut in as well as about 82.3% of natural gas production.

The storm has forced the cancellation of some events at the Republican National Convention in St Paul, Minnesota, including speeches by US President George Bush and Vice-President Dick Cheney, as they focus on its possible impact.

John McCain, due to accept the party's presidential nomination at the convention, reportedly travelled to Mississippi on Sunday to monitor preparations for the hurricane.

Hurricane Gustav has already killed more than 80 people in the Caribbean as it passed through Haiti, the Dominican Republic and Jamaica.

Graeme Paterson contributed to this article
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