Hurricane Dennis threatens Gulf coast; sends oil prices up

By Coral Beach, staff writer | Friday, July 08, 2005

If your route has you heading for the Gulf coast – particularly the Florida panhandle – beware: strong winds and heavy rain from Hurricane Dennis are predicted to begin Friday night and continue all weekend. And roads are already jammed with people evacuating the area.

On top of making travel difficult, the storm is also expected to push up the price of crude oil as production rigs in the Gulf and refineries along the shoreline are being evacuated.

The storm is predicted to brush the Florida Keys on Saturday and head northwest, passing close to several oil fields off the coasts of Louisiana, Mississippi and Alabama before slamming into the Florida Panhandle on Sunday night.

Along highway 59 in Alabama, which is the main link between beaches and Interstate 10, traffic was already heavy Friday afternoon and some convenience stores and gas stations were reporting they had run out of fuel and bottled water.

As Dennis looms, residents and businesses in some areas of the southeast are just beginning to clear debris from high winds, heavy rains and tornadoes spawned by Tropical Storm Cindy.

National Weather Service meteorologist Chip West told The AP that at least two tornadoes, one packing 140 mph winds, caused millions of dollars in damage at Atlanta Motor Speedway in Hampton before swirling northward close to U.S. 19-41. The manager of the NASCAR track, described fallen scoreboards, torn bleachers and seriously damaged condominiums. Initial damage estimates were topping $40 million Friday.

In preparation for Hurricane Dennis, Bloomberg News reported that workers have been evacuated from facilities operated by the Apache Corp., Royal Dutch/Shell Group and Transocean Inc., which is the world’s largest offshore oil and natural gas driller. It is estimated that more than a third – 38 percent – of the U.S. oil supply is delivered in the Gulf of Mexico.

As of mid-day Friday, the National Hurricane Center in Florida was reporting that Dennis was gaining power and upgraded the hurricane to a Category 4. It has winds of more than 150 mph. Storm surges and extremely high tides are also predicted for roads along the coast.

In addition to the high winds and rains, truckers should also be aware that an increased threat of tornadoes comes on the front edge of the hurricane. The most likely areas for tornadoes will be west central and southwest Florida on Saturday afternoon and evening.

Dennis is already having an impact on U.S. residents and truckers with oil prices starting to climb as industry analysts expect a lull in production from the operations in and around the Gulf of Mexico.

In early trading on Friday, crude was going for 59 cents more per barrel than it was at the end of trading Thursday, July 7, when it hit $62.10. Compared to this time last year, crude is selling for 51 percent more, Bloomberg reported Friday, July 8.

Forbes also anticipates oil prices to rise because of the storm and reported that analysts at Goldman Sachs said Tropical Storm Cindy, which hit Louisiana this week, had already reduced refinery capacity because of power outages.

“We can remember all too well the time it took for Gulf production to restart last year,” one London trader told Forbes.

Last year oil prices went up $10 a barrel in the month following the massive damage from Hurricane Ivan. Overall in Florida last year, four hurricanes caused more than $40 billion in damages.

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