Ike Moving Over Cuba, May Intensify, Spare Gulf Oil Production

By Brian K. Sullivan and Camilla Hall

Sept. 9 (Bloomberg) -- Hurricane Ike began moving over western Cuba and is expected to strengthen as it turns west into the Gulf of Mexico on a course that may spare most U.S. oil installations.

The track ``toward southern Texas will keep a large majority of the energy-production region out of harm's way,'' Jim Rouiller, senior energy meteorologist with Planalytics Inc. in Wayne, Pennsylvania, said by e-mail. ``New Orleans and Louisiana are now out of the woods.''

Ike, still a Category 1 storm, is likely to gain steam before it makes landfall in southern Texas near the border with Mexico early on Sept. 13, the National Hurricane Center said. Earlier predictions from the NHC saw Ike heading toward Louisiana, threatening oil rigs. The eye was about 40 miles (64 kilometers) south of Havana just before 8 a.m. Cuba time today, moving west-northwest at about 13 mph, the center said.

``The storm tracker looks a little less dangerous than it did last night,'' said Mike Wittner, head of oil research at Societe Generale SA in London.

Ike's sustained winds dropped to 80 mph as it moved over land, putting it on the lowest level of the five-step Saffir- Simpson scale of intensity, the center said. Ike may regain Category 3 strength, with winds of at least 111 mph, as it moves over the warm Gulf waters, U.S. forecasters said. The hurricane made landfall in eastern Cuba at Category 3 two days ago.

Dodging a Bullet

``If this southerly track continues, the major energy complex in and around Houston and Galveston Bay may dodge this bullet as well,'' Rouiller said. ``Though Mexican energy production operations may shut down, the track of Ike will probably be too far north to create significant damage.''

Corpus Christi, Texas, which the storm may slam into given the current track, has about 650,000 barrels a day of oil refining capacity, Wittner said.

Texas Governor Rick Perry issued a disaster declaration yesterday along the coast in preparation for Ike's landfall.

``It could be a major hurricane before it gets to the western Gulf Friday and Saturday,'' AccuWeather.com senior meteorologist Paul Walker said today in a telephone interview.

Cuban authorities evacuated as many as 2 million people, or almost a fifth of the population, as Ike approached, according to Agence France-Presse. Four people were killed and seven injured, the news agency said.

International broadcasters televised images of waves crashing over five-story buildings on the north coast as Ike swept ashore two days ago.

Second Cuban Landfall

Cuba issued a hurricane warning for the provinces of Matanzas, La Habana, Ciudad de Habana, Pinar del Rio and the Isle of Youth. Tropical-storm warnings were in effect in the Florida Keys from Ocean Reef to the Dry Tortugas, the center in Miami said. All watches and warnings in the Cayman Islands have been discontinued.

Ike is forecast to move over the waters between the Isle of Youth and the south coast of Havana province in the next several hours, then move over western Cuba later in the day, the center said.

On its current track, the storm's second landfall in western Cuba will take place today.

Cuba may receive as much as 20 inches (51 centimeters) of rain in isolated area, triggering flooding and mudslides, the center said.

Ike killed 66 people in Haiti, AFP said. At least 600 people have been killed as Ike, Hurricane Gustav and two tropical storms either hit the country or passed close by in the past month, AFP said. As many as 600,000 people may need assistance, United Nations humanitarian affairs chief John Holmes said.

Crude Falls

Ike, coming on the heels of Gustav last week, may keep U.S. oil and gas production in the Gulf closed until at least mid- September. The Gulf is home to more than a quarter of U.S. oil production.

Energy producers reported that personnel from 10 rigs and 202 production platforms were evacuated, according to the Minerals Management Service. There are about 717 manned production platforms in the Gulf of Mexico.

Crude oil for October delivery fell $2.27, or 2.1 percent, to $104.07 a barrel on the New York Mercantile Exchange. Oil has dropped from a record $147.27 reached in July.

Urban search and rescue teams and supplies have been positioned in Texas, Louisiana, Mississippi, Alabama and Florida in anticipation of Ike's landfall later this week, the Federal Emergency Management Agency said in a statement.

Florida Keys residents who evacuated over the weekend should be able to return home by Sept. 13, or perhaps a day or two earlier, the agency said. Ike should have passed the region completely by Sept. 10.

To contact the reporters on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net; Camilla Hall in London at chall24@bloomberg.net.