Isaac was downgraded to a tropical storm on Wednesday as it continued to batter the U.S. Gulf Coast, causing flooding and power outages but so far no discernible damage to refineries or offshore oil and gas platforms.
The National Hurricane Center downgraded Isaac from a hurricane to a tropical storm as of 3 p.m. EDT (1900 GMT). The storm center was 50 miles (80 km) to the southwest of New Orleans and maintained wind speeds as high as 70 miles (110 km) per hour.
U.S. crude oil futures dropped 84 cents to settle at $95.49 a barrel, and gasoline futures fell by around 0.7 percent on Wednesday, a sign that energy traders did not expect the region’s oil and gas infrastructure to suffer major Isaac-related damages. Natural gas futures rose by less than 1 percent.
“The rigs offshore should be up in about a week,” said Kenneth Medlock, an energy expert at Rice University’s Baker Institute in Houston.
“The offshore facilities should be OK with regard to major damage … I would not expect a prolonged production outage.”