Oil Traders Brace For Storm Cindy To Hit US Gulf Coast This Week

June 20 (Reuters) - Oil traders from Texas to Louisiana braced on Tuesday for supply disruptions as Tropical Storm Cindy, formed in the U.S. Gulf of Mexico, threatened to hit refining and production centers with wind and rain later this week.

Cindy was located about 265 miles (430 km) south of Morgan City, Louisiana with maximum sustained winds of 45 miles (75 km) per hour. It is expected to approach the coast of southwest Louisiana late Wednesday or Wednesday night, and move inland over western Louisiana and eastern Texas on Thursday, the NHC said.

The Louisiana Offshore Oil Port, the largest privately owned crude storage terminal in the United States, suspended vessel offloading operations early on Tuesday morning ahead of the storm, but said it expected no interruptions to deliveries from its hub in Clovelly, Louisiana.

Exxon Mobil Corp, Phillips 66, and Motiva Enterprises have said the storm has not yet impacted operations at its facilities. Royal Dutch Shell on Tuesday said some offshore well operations had been suspended but production was currently unaffected.

Cindy is expected to produce 6 to 9 inches (15 to 23 cm) of rain with isolated maximum amounts of 12 inches (30 cm) over southeastern Louisiana, southern Mississippi, southern Alabama, and the Florida Panhandle through Thursday, the NHC said.

The storm could also cause tornados later on Tuesday from south-central Louisiana to the western Florida Panhandle.

Crude oil prices for physical delivery along the U.S. Gulf Coast were relatively stable on Tuesday morning, but cash gasoline prices rose as traders expected refineries along the Gulf Coast to get hit with heavy rains, which may result in flooding.

Mars Sour crude was discussed around a $1.60 a barrel discount to U.S. crude futures, little changed from Monday, while Louisiana Light Sweet crude , the light sweet benchmark, was unchanged at a $1.95 a barrel premium to West Texas Intermediate (WTI).

However, prompt U.S. Gulf Coast conventional gasoline traded at a 2 cents per gallon discount to the RBOB futures contract, its strongest in four months.

Meanwhile, southeast of the Gulf of Mexico, tropical storm Bret was becoming disorganized and was expected to degenerate into a tropical wave later Tuesday or Wednesday.

That storm was located about 185 miles (295 km) east-southeast of Curacao with maximum sustained winds of 40 miles (65 km) per hour, the hurricane center said.

The Gulf of Mexico is home to about 17 percent of U.S. crude output and 5 percent of dry natural gas output daily, according to the U.S. Energy Information Administration. More than 45 percent of the nation's refining capacity is located along the U.S. Gulf Coast, which also is home to 51 percent of total U.S. natural gas processing capability.

WeatherBell Analytics LLC forecast 11 to 13 named tropical storms in the 2017 Atlantic Hurricane Season, according to a May outlook issued by the company.

The Atlantic hurricane season runs from June 1 through Nov. 30, and has an average of 9.6 named storms, 5.9 hurricanes and 2.3 intense hurricanes every year.

(Reporting by Nallur Sethuraman, Swati Verma, Apeksha Nair and Arpan Varghese in Bengaluru, Catherine Ngai and Devika Krishna Kumar in New York and Liz Hampton in Houston; Editing by Lisa Von Ahn and Chris Reese)