(Bloomberg) -- Hurricane Michael is battering the Florida Panhandle with high winds and rain, the first salvo of a storm poised to be the strongest to hit the continental United States since 2004.
Michael is about 40 miles (64 kilometers) south of Panama City, generating 150 mile-per-hour winds and moving northward at a 14 mile-per-hour clip, according to the latest National Hurricane Center update. The swift-moving monster is set to make landfill in early afternoon as the most intense storm ever to hit the panhandle region.
The storm has already cut Gulf of Mexico oil production by 40 percent and natural gas output by 28 percent. Regional ports are closed, and about 280 flights have been canceled. About 40,000 residents had lost power as of 11:45 a.m., with Duke Energy Corp. predicting as many as 200,000 outages once the storm’s center arrives.
“A storm like this could be a once-in-a-lifetime event,” said Brett Rathbun, a meteorologist with AccuWeather Inc. in State College, Pennsylvania. “Winds of this intensity can really knock down any tree or structure in its path.”
The storm is churning 28-foot waves in the Gulf, and could bring a 14-foot surge and 4 to 8 inches of rain once it makes landfall, with some isolated areas getting as much as 12 inches. Water levels on the coast are already rising quickly, with a station near the city of Apalachicola recording water rising almost 5.5 feet above ground level.
"This is the final call,” said Brock Long, administrator for the Federal Emergency Management Agency, or FEMA, in a briefing Wednesday morning. "Those who stick around to experience storm surge don’t typically live to tell about it.”
As a Category 4 storm, Michael would be the most intense to make landfall on the panhandle in U.S. records back to 1851, with the last major hurricane, Dennis, arriving as a Category 3 in 2005.
While Hurricane Florence’s winds peaked at 137 miles per hour off the U.S. coast, they dropped in intensity prior to the storm’s September landfall in the Carolinas, and it’s known more for its rains than the strength of its winds. Florence caused devastating floods, killing at least 39 and causing about $45 billion in estimated damages.
Michael “will be a different monster than Florence,” AccuWeather’s Rathbun said. Rather than lingering in one region as Florence did, inundating the Carolinas with rain, Michael is expected to race north to Georgia by Thursday, and reach the coast of Massachusetts by the weekend, he said.
The storm may weaken after landfall as it moves across the southeastern U.S. before reemerging over the Atlantic, the hurricane center said in its advisory.
Damages from the storm could reach $16 billion, depending on its intensity after landfall and how quickly it moves through the region, according to Chuck Watson, of Enki Research in Savannah, Georgia, with Panama City taking the hardest hit.
“Michael is definitely shaping up to be a classic hurricane,” Watson said by email. “So the estimates are a bit more stable since you don’t have the stall and wander problem” that made Hurricane Florence hard to calculate.
Agriculture markets, meanwhile, were shrugging off the storm. Prices for cotton, soybean and corn crops fell on Tuesday, as did orange juice futures. “Hurricanes are nearly always a ‘buy the rumor, sell the fact’ scenarios,” Louis Rose, the director of research and analysis a Rose Commodity Group, in Memphis, Tennessee, said by email.
While the panhandle is more sparsely populated than many other areas of Florida, it includes the capital city of Tallahassee, Pensacola and Panama City. The Atlantic has produced 14 named storms this year. They include Florence and Tropical Storm Gordon, which made landfall on the Alabama-Mississippi border last month.