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NEW ORLEANS -- With Tropical Storm Isaac churning through the Gulf of Mexico, oil companies are preparing for the worst as residents of the Gulf Coast brace themselves against the storm that is predicted to make landfall mid-week, the seventh anniversary of Hurricane Katrina.
Tropical Storm Isaac, which could be Hurricane Isaac by the time it reaches land somewhere between Florida and Louisiana, has prompted at least two oil giants to take precautionary measures. On Sunday, Marathon Oil Corp. said it was evacuating workers not directly involved in oil and gas production from its Gulf of Mexico operations ahead of the storm. The company added that production was not affected, according to Reuters. Marathon operates one platform in the Gulf that can produce up to 9,700 barrels per day of oil.
The news outlet also reported that BP plc, the biggest U.S. Gulf producer, shut production of all its oil and gas platforms in the area and evacuated all workers on Sunday.
National Hurricane Center meteorologist Jessica Schauer said the hurricane warning area included "quite a few oil rigs" but possibly not the heart of the U.S. offshore oil patch, which produces about 23 percent of U.S. oil output and 7 percent of its natural gas, Reuters said. Meteorologists at Weather Insight, an arm of Thomson Reuters, predict the storm will trigger short-term shutdowns of 85 percent of the U.S. offshore oil production capacity and 68 percent of the natural gas output.
Threats of outages expand past the water. After hitting land, the storm could affect low-lying fuel refineries along the Gulf Coast that account for about 40 percent of U.S. refining capacity. If that happens, gas prices could rise for the Labor Day holiday, analysts said. "It's going right in the heart of refinery row," Phil Flynn, an analyst with Price Futures Group in Chicago.
Tropical Storm Isaac is already impacting gas supplies in some areas of the Gulf Coast as residents prepared to evacuate or hunker down and try to ride out the storm. As Local15tv.com reported, yellow "Out of Service" bags are appeared on gas pumps throughout Mobile, Ala., over the weekend as some gas stations started running low on gas -- or ran dry. Adding to motorists' frustration was a 20-cent jump in prices in one night.