Cooler Atlantic May Dash Oil Bulls’ Hopes This Hurricane Season
Energy and agricultural market bulls: Beware of a cooler Atlantic Ocean.
The kind of extreme hurricanes that tend to shut oil and natural gas platforms in the Gulf of Mexico, halt pipelines and damage crops may occur with less frequency this year because of cooler waters that rob storms of the fuel they need to develop.
On Monday, Colorado State University cut its forecast for named storms to 11, from the 14 it predicted in May. Four of those could become hurricanes, while just one is likely to grow into a major system with winds of at least 111 miles (179 kilometers) an hour, based on the latest projections.
That’s a huge turnaround from last year when no less than three Category 4 storms hit U.S. shores, virtually destroying Puerto Rico’s power grid, bringing record flooding to Texas and bowling over the Florida Keys. Last year, Hurricanes Harvey, Irma and Maria helped rack up storm losses totaling more than $200 billion, the most ever.
“It is looking like a quieter season,” Phil Klotzbach, lead author of the Colorado State University study, said by telephone. “But as always, it only takes one hurricane to hit where you are to make it an active season.”
The hurricane season has always been closely watched by energy and agricultural traders because of the potential for supply disruptions and demand destruction. Almost 20 percent of America’s oil comes from the storm-exposed Gulf of Mexico, based on Energy Information Administration data. The hurricane-vulnerable coastline also accounts for 45 percent of U.S. oil refining capacity and more than half of natural-gas processing capacity.
On the agricultural side, Florida — the world’s second-largest producer of orange juice — is particularly vulnerable to Atlantic storms. One bright spot for farmers: The remnants of many tropical systems could bring much-needed rain to crops in the Great Plains and Midwest.
According to Klotzbach, the Atlantic isn’t heating up as quickly it has in previous years, so cooler waters could sap tropical storms and hurricanes of strength. On top of that, conditions in the Pacific are edging toward El Nino, a weather phenomenon that could create storm-killing wind shear in the Atlantic.
So far this Atlantic hurricane season, only one named storm has surfaced — Alberto, which formed in May. Since then, the basin has been quiet because of widespread stability in the atmosphere and great plumes of dust from Africa’s Sahara Desert blowing over the ocean, he said.
A storm gets a name when its winds reach tropical-storm strength of 39 miles (63 kilometers) per hour. Hurricane season starts on June 1 and ends Nov. 30. It usually produces an average of 12 storms.