Last year the United States experienced a temporary respite from the devastating hurricanes that swept through Florida and the Gulf Coast in 2005, but the trend toward violent storms is still in place. Hurricane Center Chief Forecaster Joe Bastardi warns that the U.S. Gulf Coast, which avoided the wrath of major storms and hurricanes in 2006, is at much higher risk of destructive tropical weather this year. And in the Atlantic, the Northeast also could suffer some hits.

“We are living in a time of climatic hardship,” said Bastardi. “We’re in a cycle where weather extremes are more the norm and not the exception. One of the ways this manifests itself is in the intensity of hurricanes and storms. Last year was just a breather because the overall pattern shows no sign of reversing in the near term.”

Storms in the Gulf, particularly in the central and eastern Gulf of Mexico, could have significant implications for the areas recovering from the devastation wrought by the hurricanes of 2004 and 2005 — which included Katrina — as well as for energy prices, because of the significant energy production that occurs in the Gulf.

While the 2007 hurricane season could affect energy prices, hurricane forecasts have already made their mark. Spurred higher by Bastardi’s forecast last Tuesday, April natural gas futures on that day soared to a high of $7.530 before settling at $7.503, up 24.9 cents from Monday’s close.

“The push higher in natural gas in my opinion is opportunistic,” said Tim Evans, an analyst with Citigroup in New York. “The comparison to the heating oil price is supportive and the near-term weather picture also looks to be supportive. I also think we had exhausted attempts down near $6.800 to get lower. If you can’t break the floor, test the ceiling. However, I really have to wonder if the market can sustain a higher price level. If people are loading up on the long side in anticipation of the hurricane season, they are going to have a long wait for the real hurricane activity to appear in August. Even till the first of June with the official start to the Atlantic hurricane season is a long time to sit with a long position if you are a speculator.

“The market is looking for an excuse to do a little bear baiting. That is at least part of the current exercise,” he said. “However, it is convenient that temperatures are going to be a little cooler over the next few weeks and it is useful having some hurricane season forecasts being released. It is important to remember that hurricane forecasts are not cumulative. If we get three forecasts for 15 named storms apiece, that does not mean there will be 45 named storms this season. It does seem like we will see another headline for a new hurricane forecast and the price will go up another 10 cents. The problem is the forecasts are not saying anything different.”

As an example, Evans highlighted Weather 2000’s hurricane forecast released Wednesday. “In their hurricane forecast they did not actually forecast the number of hurricanes,” Evans said. “What they did was issue a forecast for what they think the Colorado State University hurricane team will forecast. In addition, Weather 2000’s forecast is that Colorado State will pick 14 named storms, which happens to be unchanged from Colorado State’s December forecast, so nothing has really changed. Despite that fact, futures pushed higher Wednesday.” April natural gas futures cruised to a high of $7.715 during Wednesday’s regular session before expiring at $7.558, up 5.5 cents.

After a relatively quiet 2006, Bastardi predicted that “the Gulf and Florida face a renewed threat, and we will see more powerful storms across the board. We will not get anywhere near the amount of storms that we did in 2005, but it is the intensity of the storms we do get that will be of major concern.” Last year in May Bastardi told the Offshore Technology Conference he expected the eastern and central Gulf to be quieter and to see more storms in the western Gulf in the 2006 summer (see NGI, May 15, 2006).

Now, “we’ll see storms on the prowl in the Gulf again. The entire region — including New Orleans and other areas that are still rebuilding after Katrina — is susceptible to landfalling storms,” he said.

As for the Northeast, Bastardi’s 2006 forecast still holds: the region is likely be the target of storm strikes over the next 10 years. “Last year the Northeast may have dodged a bullet, but unfortunately you can only be lucky for so long. We are in a pattern similar to that of the late 1930s through the 1940s, when the Northeast was hit by two major storms.”

Last year, Bastardi forecast that the East Coast would be far more likely than the eastern and central Gulf to see hurricane activity, and indeed, most of 2006’s 10 storms tracked farther east than in 2005 — including many that expired in the middle of the Atlantic Ocean, and Ernesto, which caused a half-billion dollars in damages in the region from North Carolina to New Jersey.

Asked about the diminished number of tropical cyclones in 2006 compared to 2005, Director of Forecast Operations Ken Reeves said, “Keep in mind that in 1992, a year with very few storms, we saw one of the most destructive in recorded history — Hurricane Andrew. This year is shaping up to be one that features some potentially very powerful storms, so whether or not the quantity is there, the danger certainly is.”

The development of an El Nino last year has been frequently cited as a reason that the 2006 hurricane season resulted in few landfalling storms, and the development of a La Niña this year is already causing some forecasters to project a higher-than-average number of tropical cyclones in 2007. Bastardi and Reeves believe that the El Nino/La Nina connection is given too much emphasis when these events are weak.

“Last year’s season wasn’t truncated because of an El Nino,” said Reeves. “After all, there was a much stronger El Nino in effect in 2004, and that was a significantly more active hurricane season than last year. Similarly, a La Nina won’t be the main driver of this year’s hurricane season.” Among many factors that came into play, last year’s storms were weakened by drier-than-normal air and higher-than-normal levels of dust in the atmosphere over the Atlantic.

Bastardi instead points to the pattern of Atlantic Ocean water temperatures as a leading factor in determining the power of a hurricane season, as well as the overall cyclical trend of more extreme weather across the U.S. Specifically, he points to the recent hot, dry summers in the West and Plains as a precursor to increased Atlantic Basin hurricane intensity, one of the patterns identified by his comparative research of previous seasons.

The full hurricane season forecast will be available in early May, released in conjunction with the Second Annual AccuWeather Hurricane Summit in Houston.

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