Coverage: First named storm of the season begins shutting in oil production in the Gulf

The first named storm of the season, Barry, has already shit in half of oil production in the U.S. Gulf of Mexico.

Erwin Seba had the news for Reuters:

An intensifying tropical storm in the U.S. Gulf of Mexico on Thursday cut more than half the region’s oil output, with energy companies evacuating staff from nearly 200 offshore facilities and a coastal refinery.

Oil firms shut more than 1 million barrels per day of oil production, 53% of Gulf of Mexico’s output, and 1.2 billion cubic feet per day of natural gas production, according to a U.S. regulator.

Tropical Storm Barry’s winds reached 50 miles per hour (85 km/h) late Thursday and are expected to intensify, possibly reaching at least 74 mph, a category one hurricane, as it nears the coast, the U.S. National Weather Service said.

It expects as much as 25 inches (64 cm) of rain to fall, with flooding due to the rains and a storm surge.

CNBC’s Patti Domm reported Barry could grow into the first hurricane of this season:

The U.S. energy industry has halted about a third of Gulf of Mexico oil production and expects more disruptions, as the industry braces for the first hurricane of the year.

The approaching storm, which was still forming over the Gulf Wednesday, was expected to head into the Louisiana coast by Saturday, dumping a large amount of rain.

Oil prices jumped Wednesday by 4.5% per barrel on concerns the storm would disrupt oil production and threaten flooding around refineries in the area. Gasoline futures were also higher by about 4%, reaching $2 per gallon.

The National Hurricane Center is predicting that the storm will develop over the Gulf of Mexico and hit the coast of Louisiana by Saturday. The storm, to be named Barry, would be the first hurricane of the season.

Bloomberg’s Brian K. Sullivan quoted a meteorologist as saying:

“It is a heck of a water event once again,” said Bob Henson, a meteorologist with Weather Underground, an IBM company. “We keep hammering that water is a big threat and here we are again. Barry may or may not become a hurricane, but it will be a rain event and there could be surge problems.”

Ship traffic was disrupted in the Mississippi River, where water levels are rising. Companies have cut 53% of oil and 45% of natural gas output in the Gulf. Tropical-storm-force winds are reaching as far as 175 miles east of Barry’s center, according to the NHC’s advisory.

While New Orleans — where an emergency was declared Wednesday — won’t have a mandatory evacuation, residents should be prepared to shelter in place because the slow moving storm could bring heavy rain for 48 hours, Mayor LaToya Cantrell said at a press conference. The Mississippi is now forecast to crest at 19 feet, according to the National Weather Service. That should keep the river below the tops of levees in the city, according to Cantrell.