Blowing out the oil supply

Despite the National Oceanic and Atmospheric Administration (NOAA) forecasting a “normal to below normal” hurricane season this year, hurricanes remain a serious potential threat when it comes to the domestic fuel supply

Despite the National Oceanic and Atmospheric Administration (NOAA) forecasting a “normal to below normal” hurricane season this year, hurricanes remain a serious potential threat when it comes to the domestic fuel supply. For 2009, NOAA is predicting between seven and 11 tropical storms, with three to six becoming hurricanes and one or two of becoming "major" hurricanes of Category 3 or higher, with sustained winds of more than 110 miles per hour.

Seasonal forecasts are sometimes good at predicting broad, general trends. However, NOAA said such long-range forecasts cannot predict whether or when a specific location might be endangered, or its potential financial impact, because those things depend on conditions that change often.

This year’s (revised in August) forecast was based mainly on the arrival of El Nino, a periodic warming of sea waters in the eastern Pacific. El Nino can suppress Atlantic hurricane activity by increasing wind shear, a difference in wind speeds at different altitudes that can tear apart emerging cyclones."El Nino is here," Gerry Bell, the agency's lead seasonal hurricane forecaster, told Reuters news service. However, Bell warned against complacency, adding, "By no means do we expect the season to be dead."

As this year’s hurricane season unfolds, the Oil Price Information Service (OPIS) is offering a reminder of the potential impacts of these rare major events, including a refresher list of the impact of 2008’s significant storms:

  • Precautionary shutdowns amounted to almost one quarter of U.S. refining capacity before Hurricane Ike even made landfall.
  • Vessel traffic through New Orleans, Houston and the lower Mississippi River slowed to a near standstill after many ports were closed or restricted for days at a time during September 2008.
  • Sixteen refineries completely shut down and many others along the Gulf Coast ran at severely reduced rates for weeks after Hurricanes Gustav and Ike.
  • Marketers were forced to divert their trucks up to 100 miles because fuel was unavailable at a number of terminals.
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