Weaker Ida soaks U.S. Gulf Coast, hits oil supply

MOBILE, Alabama (Reuters) – A weakening Tropical Storm Ida brought drenching rain to the U.S. Gulf Coast as it slowly approached shore on Tuesday after shutting down almost 30 percent of Gulf energy production.

Once a Category 2 hurricane, Ida's threat was easing as its top sustained winds fell to 50 miles per hour, the U.S. National Hurricane Center said in a 4 a.m. EST advisory.

The center of the storm is expected to cross the U.S. Gulf Coast near Mobile, Alabama, later on Tuesday morning, the hurricane center said. After landfall, the storm is forecast to weaken further as it turns east over northern Florida.

Oil prices eased to $79 a barrel as Ida was downgraded from a Category 2 hurricane.

But the storm was already bringing heavy rainfall onshore. A tropical storm warning was in effect from Grand Isle, Louisiana, eastward to Aucilla River, Florida. The region was being pounded by rain and there were reports of flooded streets.

The warning area included New Orleans, which is still recovering from the devastation of Hurricane Katrina in 2005.

In Mobile, Alabama Governor Bob Riley warned residents to be on guard and declared a state of emergency for the state. Some 2.8 million residents of Louisiana, Mississippi, Alabama and Florida could feel the storm's effects, the U.S. Census Bureau said.

The Coast Guard closed the Port of Mobile, halting traffic on Mobile Bay, and authorities closed schools and government offices in coastal counties in Alabama and Florida, telling residents of flood-prone areas and mobile homes to evacuate.

On Monday, a U.S. Coast Guard helicopter plucked two workers from a storm-damaged oil rig south of New Orleans. Ida is blamed for 124 flood and mudslide deaths in El Salvador.

GULF OIL PRODUCTION CUT

Ida, which was downgraded from a hurricane to a tropical storm earlier on Monday, posed the first real storm threat of the 2009 Atlantic hurricane season to Gulf of Mexico oil and natural gas production, and forced some companies to shut down offshore platforms and evacuate personnel.

The U.S. Minerals Management Service said Ida had shut down 29.6 percent of Gulf oil production and 27.5 percent of gas output.

Energy markets have been hypersensitive to Gulf cyclones since the devastating 2004 and 2005 seasons, when storms like Katrina disrupted U.S. output and sent pump prices soaring.

With Ida weakening, most offshore oil rigs in the Gulf would not see any damage, said Jim Rouiller, senior energy meteorologist at private forecaster Planalytics Inc.

"I think that by tomorrow it will be normal operations across the production region," Rouiller said on Monday.

The Louisiana Offshore Oil Port, the only U.S. terminal capable of handling the largest tankers, stopped unloading ships due to stormy seas. The Independence Hub, a major offshore natural gas processing facility, also was closed.

A quarter of U.S. oil and 15 percent of its natural gas are produced from fields in the Gulf, and the coast is home to 40 percent of the nation's refining capacity.

At 4 a.m. EST, the center of Ida was about 60 miles south-southwest of Mobile and was moving north at about 9 mph, the hurricane center said.

A few coastal Alabama businesses boarded up their windows but many residents and visitors seemed to dismiss the late-season storm as little more than a nuisance.

Schools, beaches and parks closed in the Florida Panhandle, the same area hit in August by Tropical Storm Claudette, the only other cyclone to make a U.S. landfall during the 2009 Atlantic season, one of the least active in a decade.