Gustav Targets the Gulf, Oil Platforms Evacuated (Update #4)

BOTTOM LINE WEATHER POINTS
– Hurricane Gustav downgraded to tropical storm after stalling over Haiti.
– Gustav is expected to become a hurricane again as it moves towards the Gulf.
– Oil/Gas prices surge and multiple oil producing platforms have been evacuated.

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Tropical Storm Gustav was only a hurricane for a short period of time, but forecasters believe that it will likely become a hurricane again once it moves away from Haiti in the next 24 hours. Gustav stalled over Haiti after making landfall as a hurricane and killing at least five people.

Gustav is expected to pass between Jamaica and the southeastern coast of Cuba on Thursday which gives the storm ample time to strengthen over the warm waters of the Caribbean. A hurricane watch and tropical storm warning have already been issued for Jamaica.

Oil producing platforms began evacuations on Wednesday as the storm moves closer to the Gulf of Mexico. These actions are obviously already disrupting daily operations. Now oil company executives have to wait and see if the storm will actually damage their physical facilities.

Crude prices have started climbing as it becomes more likely that Gustav could enter the Gulf of Mexico as a powerful hurricane. When a large storm is headed for the Gulf, the markets become incredibly volatile, according to Lynda Clemmons, lead energy analyst with Storm Exchange.

“Crude and natural gas prices fluctuate with each weather update that comes out, leading to an enormous amount of volatility and general upward pressure on prices,” said Clemmons. “Nobody wants to miss out on these trading opportunities. Except for the smallest of trading houses or funds, most banks, energy companies, and utilities have business continuity plans that kick in depending on the threat level of the impending storm.”