NEW YORK (Reuters) - Tropical Storm Erika, which formed late Tuesday in the western Atlantic Ocean, weakened slightly early Wednesday as it approached the northern Leeward Islands, the U.S. National Hurricane Center said in its last advisory.
At about 8 a.m. EDT (1200 GMT), the disorganized center of Erika was located about 160 miles east-southeast of the Leeward Islands, moving west at 7 miles per hour with maximum sustained winds down slightly to about 45 mph.
Tropical storm warnings have been issued for Antigua, Barbuda, Montserrat, St. Kitts, Nevis, Anguilla, St. Martin, Saba and St. Eustatius.
Erika, the fifth named storm of the Atlantic hurricane season, was expected to turn west-northwest with slightly increased forward speed over the next day or two, and some strengthening was possible on Thursday.
NHC projected wind speed to increase to as much as 60 to 65 mph over the next two days before dropping back to about 55 mph by the weekend.
Most computer models show the system taking a northwesterly track toward Florida or the Southeast U.S. coast, but some models show it steering a more westerly course toward Puerto Rico, the Dominican Republic and Cuba.
Elsewhere, NHC said thunderstorm activity associated with a tropical wave in the far eastern Atlantic near the Cape Verde Islands had decreased and development, if any, of this system was expected to be slow to occur as it moved west or west-northwest at 10 to 15 mph.
NHC gave this system a low chance - less than 30 percent - of becoming a tropical cyclone during the next 48 hours.
Energy traders keep a close eye on storms that could enter the Gulf and disrupt offshore U.S. oil and natural gas production or refinery operations along the coast.
Commodities traders likewise watch storms that could damage agriculture crops such as citrus and cotton in Florida and other states along the coast to Texas.
Pricing of insurance-linked securities, which transfer insurance risks associated with natural disasters to capital markets investors and can be used to hedge other weather risk exposures, can also be affected by the path of a storm.
Elsewhere, tropical cyclone formation was not expected during the next 48 hours.
NHC will issue its next advisory at 11 a.m. EDT.
Reporting by Joe Silha, editing by John Picinich