Natural gas prices for July ’15 delivery pushed higher again on Tuesday morning after yesterday’s rally which caused prices to spike 13.9 cents, or more than five percent.
The area of low pressure that was forming in the Gulf of Mexico was officially named a tropical storm on Monday night as the storm moved closer to Texas and Louisiana.
The storm contained winds of 50 mph and was moving northwest at 12 mph. The National Hurricane Center said that Bill could increase in strength before making landfall on Tuesday. However, they expected the storm to quickly weaken after making landfall.
Natural gas traders and investors are keeping a close eye on the storm to determine any impact to both offshore and onshore production.
Many large-name oil and gas producers such as Chevron, Royal Dutch Shell, and BP all indicated that they were removing non-essential personnel from operations, but they expected no impact to production.
However, Tropical Storm Bill is expected to bring heavy rains to Texas which could create flooding conditions and ultimately impact production or pipeline operations.
“Expect bands of showers and thunderstorms containing very heavy rainfall Tuesday and Wednesday associated with the tropical disturbance that will be moving across the Texas coast and then off to the North,” said the National Weather Service.
“If everything lines up correctly, rainfall totals through Wednesday for parts of the area could approach the five to seven-inch range, with some amounts exceeding 10 inches.”
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