As expected Tropical Storm Edouard, the 5th named Atlantic storm of the season, has strengthened while making it’s way towards the Texas coast. Currently sustained winds are up around the 60mph mark with the potential to increase further before it makes landfall. There have been reports from some elevated oil rigs south of the Louisiana coast of gusts of wind of close to hurricane force and there is a possibility Edouard could reach hurricane strength just prior to landfall.
Impact on the Gulf oil production region has been minimal with little damage expected, oil prices remain unchanged due to the storm. There is a chance Edouard may come close to Exxon Mobil Corps. Baytown refinery as well as BP Plc’s Texas City plant though so the oil industry are watching the storms progress closely.
The main risk of damage will come from rainfall. Having only just had Dolly give them a thorough soaking, Texans must be dreading the thought of further flooding. At the moment the forecast is for Edouard to produce rainfall amounts of 4 to 6 inches over Texas with isolated amounts of as much as 10 inches over southeastern Texas.
Edouard’s current position is below:
As with Dolly, there is little chance of Edouard triggering any of the catastrophe bonds which have exposure on the Texas coast.