Gustav Heads Past Cuba for Gulf After Drenching Haiti

By Brian K. Sullivan and Ryan Flinn

Aug. 28 (Bloomberg) -- Tropical Storm Gustav churned across the Caribbean south of Cuba, bearing down on Jamaica and the Cayman Islands, as it headed on a track that may take it to the U.S. Gulf Coast region devastated by Hurricane Katrina.

Gustav, which weakened from a hurricane as it passed over Haiti, is likely to regain power in the Caribbean and may intensify into a Category 3 hurricane or stronger as it enters the Gulf of Mexico by Aug. 30, forecasters say. Crude rose as the storm is expected to hit the Gulf's oil-producing region.

``The potential we see in this thing is pretty high,'' Dan Kottlowski, a meteorologist with private forecaster AccuWeather.com, said in an interview yesterday. ``It would not take too much to make this a category 5 hurricane.''

Gustav killed at least 22 people in Haiti and the Dominican Republic as it passed over the island of Hispaniola, which they share, the Associated Press reported yesterday. A tropical storm warning is in effect for parts of southern Cuba.

The eye of Gustav, where sustained winds are almost 45 miles (75 kilometers) per hour, was 105 miles south-southwest of Guantanamo, Cuba, and 80 miles east-northeast of Kingston, Jamaica, just before 2 a.m. Miami time yesterday, the U.S. National Hurricane Center said in its latest advisory.

It was moving west-southwest at about 8 mph on a path that should take it between Jamaica and Cuba today and tomorrow, the advisory said. Gustav may regain hurricane strength by tomorrow before 8 p.m. Miami time.

Dumping Rain

As much as 25 inches (64 centimeters) of rain may fall in parts of the Dominican Republic, Haiti, eastern Cuba, Jamaica and the Caymans, the center said.

Louisiana Governor Bobby Jindal declared a state of emergency yesterday, WWL-TV reported. Jindal also asked the White House to issue an emergency declaration before the storm hits land, according to the news station.

New Orleans Mayor Ray Nagin said in a statement he'd leave the Democratic National Convention in Denver to head home and manage preparations for the storm.

The Federal Emergency Management Agency was on alert and said it had food, water and supplies ready to move into the area.

New Orleans is planning a commemoration tomorrow for the third anniversary of Hurricane Katrina, the most economically destructive hurricane in U.S. history. Katrina cost the Gulf coast states hit by the storm as much as $125 billion, according to the National Oceanic and Atmospheric Administration.

``The upper Texas coastline to Louisiana remains most at risk,'' Rouiller said. ``The entirety of the Gulf energy production region remains under the gun.''

Oil Production

U.S. oil and gas platforms and pipelines are most concentrated in the waters south of Louisiana and east of Texas. Offshore fields in the Gulf accounted for 26 percent of total U.S. crude production and 12 percent of natural gas output in April, according to the U.S. Energy Department.

In August and September 2005, U.S. crude oil and fuel production plunged and prices rose to records when hurricanes Katrina and Rita shut refineries and platforms as they struck the Gulf coast. Katrina closed 95 percent of offshore output in the region. Almost 19 percent of U.S. refining capacity was idled because of damage and blackouts caused by the hurricanes.

Louisiana has 19 oil refineries, which together process almost 3 million barrels a day. Those closest to the coast include ConocoPhillips' Belle Chasse refinery and Petroleos de Venezuela SA's Chalmette plant, both near New Orleans, and several refineries clustered near Lake Charles, in the southwest corner of the state.

Evacuating Workers

``Several thousand'' of the almost 20,000 workers on offshore platforms in the Gulf of Mexico, about one-quarter of whom are needed to maintain production, were to be evacuated, Ted Falgout, director of Port Fourchon in Louisiana, said in an interview yesterday. The port is a staging area for rig workers.

Crude oil for October delivery was at $118.78 a barrel, up 63 cents, at 11:45 a.m. Singapore time on the New York Mercantile Exchange. Prices, 65 percent higher than a year ago, have dropped 19 percent from a record $147.27 a barrel on July 11. Yesterday, oil rose $1.88, or 1.6 percent, to $118.15.

``Right now we're forecasting Category 3, and one category higher or lower is not out of the question,'' Eric Blake, a meteorologist at the hurricane center, said yesterday in a phone interview.

Category 3 storms on the five-step Saffir-Simpson scale of intensity have sustained winds of at least 111 mph, while Category 4 hurricanes blow at a minimum of 131 mph. A weather system is designated a tropical storm when sustained winds reach 39 mph, and a hurricane at 74 mph.

To contact the reporters on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net; Ryan Flinn in San Francisco at rflinn@bloomberg.net