Dolly Hurricane , will it effect Oil prices ??

Hurricane Dolly Strengthens Near Texas-Mexico Border (Update3)

By Gregory Viscusi

July 23 (Bloomberg) -- Hurricane Dolly strengthened in the Gulf of Mexico as it approached the Texas-Mexico border and may grow into a Category 2 storm before making landfall today, U.S. forecasters said.

The system's eye was about 45 miles (70 kilometers) east of Brownsville, Texas, the National Hurricane Center said on its Web site at 7 a.m. Brownsville time. Sustained winds were almost 85 miles per hour. Winds of tropical-storm force swept the coast as Dolly headed northwest at almost 8 mph. The hurricane probably will reach the coast around midday, the center said.

Dolly is the season's first hurricane in the Gulf, home to more than a quarter of U.S. oil production. The predicted path is south of most rigs, which are along the East Texas and Louisiana coasts. Energy companies evacuated some platforms as a precaution and cut production in the Gulf by 4.7 percent, according to the U.S. Interior Department.

Dolly may dump 6 to 10 inches (15-25 centimeters) of rain on South Texas and northeastern Mexico during the next few days, probably causing widespread flooding, forecasters at the Miami- based center said. As much as 15 inches may fall in some areas. A coastal storm surge of 4 to 6 feet (1.2 to 1.8 meters) above normal is predicted near and north of the point of landfall.

``Preparations to protect life and property should be rushed to completion,'' the center said.

Crude Lower

The forecast for Dolly to miss the rigs contributed to a decline in the price of oil. Crude for September delivery fell as much as $2.20, or 1.7 percent, to $125.75 a barrel, and traded at $126.30 at 12:18 p.m. London time on the New York Mercantile Exchange.

Companies that carried out evacuations include BP Plc, Noble Corp., Chevron Corp., Devon Energy Corp., Citgo Petroleum Corp. and Royal Dutch Shell Plc.

A hurricane warning was in place from Corpus Christi, Texas, south to the San Fernando River in Mexico, the center said. That means hurricane conditions are expected in the next 24 hours. The U.S. Coast Guard yesterday warned boaters of high seas and destructive winds and said rescue services may be ``seriously degraded or unavailable'' as the storm neared.

Texas Governor Rick Perry activated 1,200 National Guard personnel and a half-dozen Black Hawk helicopters, which can deliver emergency supplies.

Dolly was a Category 1 hurricane, the weakest on the five- step Saffir-Simpson scale. Category 1 storms have sustained winds of 74 to 95 mph. The sustained winds of Category 5 hurricanes exceed 155 mph.

The systems become tropical storms, and are named, when sustained winds reach 39 mph.


Here is another reason for oil prices to go higher today !!