(Bloomberg) -- Hurricane Nate, on track to strike near New Orleans overnight Saturday, is threatening to cause close to $1 billion in damage across Central America and the U.S. following the most powerful month of hurricanes on record.
Nate, which the National Hurricane Center upgraded to a hurricane from a tropical storm on Friday night, triggered flooding and landslides in Central America, leaving at least 17 dead in Costa Rica and Nicaragua, and shuttered oil and natural platforms in the Gulf of Mexico. It could make landfall in the U.S. as a Category 1 hurricane with winds exceeding 74 miles (119 kilometers) an hour. Soaking rains across eastern Mississippi and Alabama may damage cotton crops. Gas output in the Gulf fell to a three-year low.
Accumulated cyclone energy, a measure of storm power and longevity, set a record in September, according to the U.S. National Hurricane Center, a month that saw Hurricane Maria slam Puerto Rico at Category 4 strength and Hurricane Irma batter Florida with 130 mile per hour winds. All told, 14 storms have formed across the Atlantic this season, killing hundreds in the U.S., Mexico and the Caribbean and causing an estimated $300 billion in damage.
For New Orleans, “the big issue is potentially the rain,” said Chuck Watson, a disaster modeler at Enki Research in Savannah, Georgia. “All of that has to be pumped out since so much of the city is below lake and sea level. The infrastructure isn’t in great shape.”
The storm was about 345 miles (555 kilometers) south-southeast of the mouth of the Mississippi River, with top winds of 80 miles an hour, up from 50 mph earlier, the hurricane center said Saturday in an advisory at 4 a.m. New Orleans time. An Air Force Hurricane Hunter aircraft penetrated the center of Nate and reported hurricane-force winds, it said.
“I am amazed at how fast it is moving,” said Matt Rogers, president of the Commodity Weather Group LLC in Bethesda, Maryland. “It just lifted off Honduras and it is going to make landfall in New Orleans by tomorrow.” Nate was moving north-northwest at 22 mph, the hurricane center said.
Hurricane warnings are in place from Grand Isle, Louisiana, to the Alabama-Florida border, including New Orleans, while a storm surge warning covered much of the Louisiana coast.
While Nate is forecast to strike near where Katrina hit in 2005, there’s a big difference between the storms. Katrina brought a 24- to 28-foot (7.3- to 8.5-meter) storm surge with it that killed 1,800 people and flooded New Orleans. Nate’s surge is forecast to reach four to seven feet.
Preliminary damage estimates for Nicaragua, Honduras and the rest of Central America stand at about $250 million. Nate could cause another $700 million to $800 million in the U.S., Watson said. About 128,000 utility customers in the U.S. may lose power, based on a forecast model developed by university researchers.
Orange-juice futures rallied on speculation that Nate may damage crops. Drillers including BP Plc and Chevron Corp. evacuated and shut oil and gas platforms in the Gulf. Phillips 66 was said to have reduced refining rates at the Alliance plant south of New Orleans, and the U.S. Coast Guard limited vessel traffic in the region.
Platforms in the Gulf of Mexico account for about 17 percent of U.S. oil output and 4 percent of gas production. Roughly 45 percent of petroleum refining capacity is on the coast. Gulf gas output may drop as much as 1.4 billion cubic feet a day, according to Shunondo Basu, an analyst at Bloomberg New Energy Finance.
Read More: Nate Puts Refineries, Offshore Platforms in Cross Hairs: BNEF
While energy production may be curtailed, the storm probably won’t be strong enough to do any lasting damage, Rogers said. “There will definitely be disruption, but it is such a short-lived event,” he said. “It will be over by Sunday.”
Nate may dump as much as 6 inches of rain across U.S. Gulf Coast states, the eastern Tennessee Valley and southern Appalachians through the weekend, the hurricane center said. Some areas may get 10 inches. That’s “definitely” doing damage to cotton there and slowing harvesting, said Donald Keeney, a meteorologist with MDA Weather Services.