Oil traders from Texas to Louisiana braced on June 20 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, La., with maximum sustained winds of 45 miles (75 km) per hour. It is expected to approach the coast of southwest Louisiana late June 21 and move inland over western Louisiana and eastern Texas on June 22, the National Hurricane Center (NHC) said.

The Louisiana Offshore Oil Port, the largest privately owned crude storage terminal in the U.S., suspended vessel offloading operations early June 20 ahead of the storm but said it expected no interruptions to deliveries from its hub in Clovelly, La.

ExxonMobil Corp. (NYSE: XOM), Phillips 66 (NYSE: PSX) and Motiva Enterprises LLC have said the storm has not yet impacted operations at its facilities. Royal Dutch Shell Plc (NYSE: RDS.A) on June 20 said some offshore well operations had been suspended but production was currently unaffected.

Cindy is expected to produce 6 inches to 9 inches (15 cm 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 June 22, the NHC said.

The storm could also cause tornados later on June 20 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 early June 20, 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 (bbl) discount to U.S. crude futures, little changed from June 19, while Louisiana Light Sweet crude, the light sweet benchmark, was unchanged at a $1.95/bbl 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 June 20 or 21.

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