Tropical storm Bill lands on Texas coast: Update
Shell evacuated non-essential staff from the western US Gulf of Mexico and pilots expected no traffic in the Houston Ship Channel for two days. But Bill, the first named storm to make a US landfall during the 2015 Atlantic hurricane season, is not expected to bring major energy supply impacts.
The storm made landfall at 12:45pm ET at Matagorda Island, 138 miles (222km) southwest of Houston. The storm had sustained winds of 60 mph (96 kph) and was expected to drop 4-6 inches of rain, the National Weather Service said.
The Houston area braced for potential flooding.
US refiners operate 4.6mn b/d of capacity on the Texas coast and almost 4mn b/d of that in the Houston area.
Pilots operating in the Houston Ship Channel, home to one of the largest US liquefied natural gas export terminals, suspended loadings last night ahead of the storm. A notice to customers reported 15 incoming and 17 outgoing vessels waiting for conditions to clear. Pilots expect the channel to remain closed to 18 June.
Energy traders keep a close eye on storm activity as it can affect production or damage infrastructures in the US Gulf of Mexico. Storm activity has had less influence on oil and natural gas prices in the years since Hurricanes Katrina and Rita wreaked havoc in the Gulf because so much domestic production has moved onshore.
But storms can still take a toll on refineries and gas processing plants through power outages and flooding, leading to price spikes for refined products and NGLs. Storms that make landfall can also cause power losses, cutting into demand for generation fuels.
The Energy Information Administration estimates the lighter 2015 Atlantic hurricane season could shutter 53,000 b/d of crude and 87mn cf/d (2mn m?/d) of natural gas production in the US Gulf of Mexico. The shut-ins would represent about 2.8pc of US Gulf natural gas output and 3.5pc of projected crude input.
Federal forecasters predict this year's season will bring six to 11 named storms, but two or less major storms, according to the US National Oceanic and Atmospheric Administration.
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