Here comes the storm.
U.S. oil prices spiked past $70 a barrel Tuesday as Tropical Storm Gordon gathered pace across the Florida Keys and headed north towards the Louisiana coast, forcing the closure of several drilling installations in the Gulf of Mexico.
Gordon is expected to gather speed over the next several hours and could be upgraded to category one hurricane -- with wind speeds of around 75 miles per hours -- when it makes landfall on the southeastern Louisiana coast later this morning, leaving as much as 10 inches of rain in rain in its wake. Louisiana Governor John Bel Edwards has declared a state of emergency for the region and plans to deploy as many as 200 national guard troops along the coast to assist as the storm makes landfall, while rig operator Anadarko Petroleum said it has evacuated two of its platforms in the Gulf.
"Right now the storm track has moved slightly to our east, but the threat of severe weather continues to exist for Louisiana," Bel Edwards told reporters Monday. "It is critically important for everyone to remember that this storm has every possibility to track further in our direction. In fact, if you look at the cone of the present track, it includes New Orleans and Baton Rouge."
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Brent crude contracts for November delivery, the global benchmark, gained $1.04 cents from their Monday close and were changing hands at $79.21 per barrel in early European trading. WTI contracts for the same month, which are more tightly-linked to U.S. gas prices, were seen $1.04 cents higher at $70.74 per barrel. Gasbuddy.com, the comparison website, indicated that U.S. gas prices averaged around $2.82 per gallon of the Labor Day weekend, the highest level in four years, prior to the Tuesday price spike.
"Strengthening is expected today, and Gordon is forecast to be a hurricane when it makes landfall along the north-central Gulf Coast," the National Hurricane Center said Tuesday. "Rapid weakening is expected after Gordon moves inland."
Gordon's landfall comes just one year on from Hurricane Harvey, which pummelled the coasts of Texas and Louisiana for four days with 40 inches of rain and flash floods in major cities such as Houston. Harvey, first first hurricane to make landfall in the United States in 12 years, eventually caused as much as $125 billion in damage, a figure that matched the economic toll of Hurricane Katrina in 2005.
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