Bloomberg News

Isaac Watched by Traders, Republicans on Move to Florida

August 23, 2012

Tropical Storm Isaac, moving through the Caribbean Sea, may become a hurricane tomorrow as it travels west on a path watched by commodity markets and officials preparing for the Republican National Convention.

Isaac is forecast to strengthen and cross Haiti and Cuba before arriving on the southwestern Florida coast Aug. 27, the National Hurricane Center said. That’s the opening day of the Tampa gathering at which Republicans are expected to nominate Mitt Romney as their presidential candidate.

“Significant uncertainty remains about the threat Isaac poses to Florida,” the center said today.

Orange-juice futures rose the most in more than seven weeks on ICE Futures U.S. in New York yesterday because of the storm, then fell today as concern eased that groves may be harmed. Natural gas gained on the New York Mercantile Exchange before declining today on a stockpile gain.

Computer forecast models, which had disagreed about Isaac’s track, are starting to “show a little more convergence” and predicting a path into the eastern Gulf of Mexico, said Travis Hartman, a forecaster with MDA EarthSat Weather.

Assessing Risk

“It is better for the GOP convention in Tampa, but it is a little bit more of a risk to energy assets in the Gulf,” Hartman said by telephone from Gaithersburg, Maryland. “We’re not targeting the production area just yet, but the trend is a little bit toward that direction right now.”

Florida Governor Rick Scott said that while it’s too soon to say where Isaac may make landfall, the state “must take every precaution.” The Republican National Convention will decide whether to relocate, Scott said today at a press briefing in Tallahassee, the state capital.

“There’s not an anticipation that there will be a cancellation,” Scott said. “Florida is ready. The state is more prepared than any state in the country for hurricanes.”

Scott declined to disclose contingency plans. The governor said he has activated an emergency operations center and will hold briefings twice daily.

Isaac, the ninth named storm of the Atlantic hurricane season that runs through November, was 165 miles (265 kilometers) south of San Juan, Puerto Rico, the Miami-based center said in an advisory at 2 p.m. East Coast time. The system, moving west at 15 miles per hour, packed maximum sustained winds of 40 mph, down from 45 mph. That’s below the minimum 74 mph speed of a Category 1 hurricane.

Islands Affected

The storm may bring as much as 10 inches (25 centimeters) of rain to Puerto Rico and the Virgin Islands, while 20 inches (51 centimeters) of rain and water levels 5 feet above normal are possible along the coast of Hispaniola, the center said.

Isaac is expected to strengthen during the next 48 hours and may become a hurricane tomorrow before it reaches Hispaniola, the center said.

“There is a one in four chance that we can get a strong storm in the production area” of the Gulf, said Matt Rogers, president of the Commodity Weather Group LLC in Bethesda, Maryland. “In another few days, there is probably going to be a lot of talk about shut-ins and evacuations.”

Gulf Threat

The Gulf of Mexico is home to 29 percent of U.S. oil production, 6.3 percent of natural-gas output and 40 percent of refining capacity, according to the U.S. Energy Department. Florida is the second-largest orange grower, after Brazil.

PHI Inc. said it may begin evacuating personnel from offshore oil and gas production platforms and drilling rigs tomorrow as Tropical Storm Isaac spins toward the U.S. Gulf of Mexico.

“It’s my understanding that some of our customers will start tomorrow,” Richard Rovinelli, chief administrative officer for the Lafayette, Louisiana-based helicopter company, said today in a telephone interview.

Critical to Isaac’s future is how much time the storm spends over Cuba, Haiti and the Dominican Republic, Hartman said. Mountains on those islands may tear its structure, weakening it. When Isaac moves back into water, the system will have a chance to strengthen.

Tampa Visitors

More than 50,000 people are expected to visit the Tampa Bay area next week as Republicans hold their four-day convention, said James Davis, a convention spokesman.

Tampa is the second-largest metropolitan area in Florida, after Miami, with nearly 2.8 million people, according to Census data. An estimated 50,000 are expected to attend the four-day convention, including 15,000 representatives of the media.

The Tampa Bay Times Forum, site of the gathering, is in a mandatory evacuation zone once storms reach 96 mph, a Category 2 on the five-step Saffir-Simpson scale, according to the Hillsborough County Hurricane Guide.

The most violent storm to hit the city, in 1848, sent 15 feet of water over land now home to the Tampa Bay Convention Center, where media will be headquartered, Masters said.

Tropical Storm Joyce, the 10th of the hurricane season, formed today in the Atlantic Ocean about halfway between the Lesser Antilles and the Cape Verde Islands.

The storm, with top winds of 40 miles (64 kilometers) per hour, isn’t expected to strengthen much in the next two days and poses no immediate threat to land.

To contact the reporters on this story: Brian K. Sullivan in Boston at bsullivan10@bloomberg.net; Asjylyn Loder in New York at aloder@bloomberg.net.

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net.


The Good Business Issue
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus