The fourth named storm of the 2012 Atlantic tropical storm and hurricane season has formed in the northern Gulf of Mexico and now looks set to become the second hurricane of the season and a threat to land. Tropical storm Debby is moving slowly through the northern Gulf and has currently seen sustained winds of 60mph with tropical storm force winds extending up to 200 miles from the center, making Debby a large tropical system.
The forecast models diverge on exactly where Debby will head, with some forecasting a move towards the north and east which could threaten Louisiana and the Florida panhandle, but the National Hurricane Center see’s Debby moving gradually west with Texas being the storms eventual destination. You can see tropical storm Debby’s current position and forecast path below.
Debby is forecast to become hurricane Debby over the next day or two and the NHC forecast suggests she could intensify before making landfall somewhere in Texas next weekend. It’s a difficult storm to predict though and Debby could wobble around in the northern Gulf of Mexico for quite a few days before her course becomes totally clear. Of course the longer Debby stays over warm seas in the Gulf the more chance of intensification as the warm waters could feed the storm assisting her strengthening. There is also a chance that Debby could meander closer to the coast and that could hinder development of the storm.
So at this time it’s hard to say for sure how much of a threat Debby will pose to the insurance, reinsurance and catastrophe bond sectors. This is a storm to watch though as Debby is a large tropical storm and she could have a lot of time to intensify over the Gulf. There are plenty of cat bonds exposed to Debby along the Gulf Coast too, so investors may like to keep an eye on her progress on our 2012 Atlantic hurricane season page.
A good number of oil and gas platforms have locked in production and evacuated all but essential staff as Debby approaches and her eventual strength remains uncertain. The chance of impact from Debby should become clearer over the next few days and we’ll keep you updated.
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