Energy market eyes Tropical Storm Fay again

NEW YORK (Reuters) - Energy traders started to watch Tropical Storm Fay again on Wednesday for a possible return to the oil-rich Gulf of Mexico where it could disrupt oil and natural gas production and refining facilities.

One private forecaster said there was a 60 percent chance Fay will emerge into the northern Gulf of Mexico early next week and re-intensify, while another forecaster said there was just a 20 percent chance of Fay getting into the Gulf, energy traders said.

The 20 percent forecaster added that even if Fay does re-enter the Gulf its proximity to land would likely keep it from becoming a major storm.

Most weather models, however, show Fay will move well inland over central Georgia and Alabama over the next few days -- far from Gulf Coast oil and natural gas facilities.

Fay is now off the east coast of central Florida near Cape Canaveral. It is expected to strengthen to near hurricane strength before moving inland over northeast Florida in about 36 hours and then cross the northern part of the state through the weekend, the U.S. National Hurricane Center said in a report at 8 a.m. EDT.

The NHC forecast Fay will weaken into a tropical depression within 48 hours. The NHC does not expect Fay will gain any strength over the next five days after moving inland over northern Florida on Thursday.

The NHC expects the remnants of Fay to reach the Florida-Alabama border near Mobile, Alabama, on the Gulf Coast, with winds below 30 mph.

ATLANTIC LOW

A low-pressure system in the Atlantic Ocean midway between Africa and the Lesser Antilles became less organized by Wednesday morning, the NHC said.

The NHC said there was now less than a 20 percent chance the system could develop over the next 48 hours. The NHC said on Tuesday night there was a 20 to 50 percent chance it could develop.

The energy market started watching the Atlantic system on Monday after Tropical Storm Fay hit the Florida Keys and looked like it would remain over Florida for the rest of the week, missing the oil rigs in the Gulf of Mexico.

The Atlantic system will likely pass the Lesser Antilles over the next several days.

The models are split on whether the system will move west toward the central Caribbean Sea or northwest toward the Bahamas and Turks and Caicos.

It is still too soon to say whether the Atlantic system will make landfall in North America.

The NHC will name the next tropical storm Gustav. Tropical storms pack winds of 39 to 73 mph.

Energy traders watch for storms that could enter the Gulf of Mexico and threaten U.S. oil and gas production facilities.