Tropical Storm Barry could form in Gulf of Mexico, rattling markets

By Brian K. Sullivan on 7/8/2019

BOSTON (Bloomberg) -- A tropical storm could form in the eastern Gulf of Mexico by Thursday and potentially swirl through offshore oil and gas fields along the coast.

The system, now a cluster of showers and low pressure across Georgia, has an 80% chance of becoming a tropical system in the next five days as it slides south over the warm waters of the Gulf of Mexico, according to the U.S. National Hurricane Center in Miami. If its winds reach 39 mi (63 km) per hour, it would be named Tropical Storm Barry.

“All three of our top models say something is going to form,” said Jeff Masters, co-founder of Weather Underground, an IBM company, in Ann Arbor, Michigan. “If it does, it will take a track through the oil producing region from east to west making landfall near the Texas and Louisiana border.”

On its potential track, the storm could cause shut-ins at offshore oil and natural gas production assets as non-essential personnel are pulled off platforms, said Jim Rouiller, chief meteorologist at the Energy Weather Group in Philadelphia. There is a chance the system’s clouds could also help crimp energy demand by dulling heat building across the South.

“This will become a good conversation piece on the trading floor,” he said.

Warm waters

High pressure across the central U.S. -- which is spurring on heat that’s likely to boost energy demand in the Midwest and Northeast -- will steer the potential storm toward the west, according to Rouiller.

The storm will have few impediments to grow once it gets over Gulf waters, which are running warmer than average. Florida had its hottest May on record, according to the U.S. Centers for Environmental Information.

That heat helped push the Gulf to a “pretty darn warm” 86 degrees Fahrenheit (30 Celsius), Weather Underground’s Masters said. Tropical storms and hurricanes thrive on warm water.

The storm could be kept from getting too strong if stays long over land, according to Masters. If it enters the Gulf closer to Alabama it won’t have as much time to gain strength, but if it’s farther to the east near Florida, it will have more time.

Both Masters and Rouiller said there’s an outside chance the system could even become a Category 1 hurricane – the weakest on the five-step Saffir-Simpson scale.

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