August 25, 2006

Tropical Storm Ernesto forms in Caribbean

NEW YORK (Reuters) - The 2006 Atlantic hurricane season's
fifth named storm, Ernesto, formed late on Friday in the
eastern Caribbean Sea, the U.S. National Hurricane Center said
in its latest storm update.

The storm was forecast to reach the Gulf of Mexico early on
Wednesday and could threaten oil and gas production that has
not yet fully recovered from last year's hurricanes.

As of 5 p.m. EDT (2100 GMT), Ernesto was located about 300
miles south-southwest of San Juan, Puerto Rico, moving
west-northwest at 16 miles per hour with maximum sustained
winds near 40 mph.

NHC said additional strengthening was possible during the
next 24 hours.

Computer models showed the storm tracking in a
northwesterly direction across the Caribbean, nearing western
Cuba or Mexico's Yucatan Peninsula early Tuesday, then moving
into the southern Gulf of Mexico early Wednesday.

Energy traders were keeping a close eye on the storm's
path, noting the Gulf Coast region provides about a quarter of
the nation's oil and natural gas supplies.

Last year, hurricanes Katrina and Rita temporarily knocked
out all Gulf Coast crude oil production and about 90 percent of
natural gas output, helping to drive energy prices to record

About 10 percent of daily offshore Gulf of Mexico oil and
natural gas output is still shut in because of last year's
storm damage, according to the U.S. Mineral Management
Service's last report released in June.

An intermediate advisory will be issued by NHC at 8 p.m.
EDT followed by the next complete advisory at 11 p.m..