U.S. energy market eyes Tropical Storm Fay again

NEW YORK, Aug 21 (Reuters) - Energy traders again watched Tropical Storm Fay on Thursday as it headed toward the oil-rich Gulf of Mexico which it may hit over the weekend and could disrupt oil and natural gas production and refining facilities in Alabama and Mississippi.

Fay caused extensive flooding on the east coast of Florida and continued to drop heavy rains. The flooding shut a reactor at the St Lucie nuclear power plant about 120 miles north of Miami on Wednesday. [ID:nN20484276]

The storm remained just offshore about 20 miles east-southeast of Daytona Beach, Florida, the U.S. National Hurricane Center said in its 5 a.m. EDT (0900 GMT) report.

The NHC forecast Fay would move inland within 12 hours and weaken from a tropical storm, with winds of 39 to 73 miles per hour, to a tropical depression, with winds below 39 mph, in about 36 hours as it moved west across northern Florida.

It should be a tropical depression when it reaches the Florida Gulf Coast on Friday. Even though Fay will hug the warm Gulf waters as it moves across the Florida Panhandle and southern Alabama and Mississippi Saturday through Tuesday, the NHC did not expect the system to strengthen due to its proximity to land.

On Wednesday, some weather models forecast Fay would re-enter the Gulf where it could strengthen, but all of the models now project that Fay would remain over land during the next five days in Florida, Georgia, Alabama and Mississippi.

ATLANTIC LOW

Energy traders were also eyeing a low-pressure system about 1,000 miles east of the Windward Islands.

The NHC said in a report at 2 a.m. the Windward system remained disorganized and had less than a 20 percent chance of developing into a tropical depression over the next 48 hours.