Hurricane Season Blows In, Energy Markets Await Results

Written By Brianna Panzica

Posted June 5, 2011

The hurricane season began on Wednesday, June 1.

This year is predicted to be above average as far as storms go, with about 16 tropical storms anticipated by Colorado State University.

Of these 16 storms, 9 are forecast to become hurricanes and 5 have the potential to be major hurricanes, which means a category 3 or stronger on the Saffir-Simpson scale.

A category 3 hurricane means that if the hurricane makes landfall, “devastating damage” will occur.

Anything higher would cause “catastrophic damage”.

Yet although CSU announced a 72% chance one will touch the U.S. coast, there is actually no guarantee any of them will.

While last year was also an above average season, 2008 was the last time a hurricane made landfall in the United States.

And wouldn’t it be great if 2011 weren’t the next?

But if one does, the energy markets would do best to hope they stay away from the Gulf Coast.

The Gulf of Mexico is the hub of American gas and oil production and refineries, and there are drilling locations off the coast as well.

The last two hurricanes to hit the Gulf  — hurricanes Katrina and Rita — caused devastating damage.

Oil production took these hits hard.

With ongoing problems in the Middle East, another similar occurrence could drive gas prices up even more.

CSU says there’s a 47% chance a hurricane will hit the Gulf of Mexico.

And yet even if oil takes a hit, so to speak, natural gas probably will not.

In fact, it is even speculated that hurricanes could decrease the price of natural gas.

This of course would depend on a drop in demand due to any widespread damage, but this could very well occur as lower temperatures that follow hurricanes decrease the necessity for air conditioning.

It also would depend on power outages and the like that will shut down bigger users of natural gas.

Either way, the energy market stands precariously balanced until the hurricane season blows over on November 30th.

Let’s hope this occurs without incident.

That’s all for now,


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