NGI The Weekly Gas Market Report / NGI All News Access

Energy Industry's Focus Now Centered Firmly on Summer Temps, Hurricane Season

With natural gas futures traders continuing to hang on every sentence that includes the words "summer," "temperatures" and "hurricanes," MDA EarthSat Energy Weather's updated summer 2006 outlook and Weather 2000's tropical expectations are sure to garner attention.

MDA EarthSat's summer outlook could give bulls a reason to cry as the company continues to favor seasonal to cooler than normal conditions for the eastern half of the U.S. and warmer than normal across the West.

"Summer is still favored to be seasonal to cool overall in the East and warm to hot in the West," said Matt Rogers, deputy director and meteorologist for MDA EarthSat. "A potentially evolving El Nino and drought issues will need to be monitored. Looking monthly, June may have the best opportunity for any significant heat in the East this summer." He added that national population weighted cooling degree days are forecast to be near the 30 year normal.

While MDA EarthSat's summer forecast could be classified as somewhat bearish, bulls could find themselves in the driver's seat nonetheless if the company's hurricane forecast holds up.

"In just the past month, the Gulf has trended significantly warmer (sea surface temperatures) we are still anticipating another very active season," Rogers said. He added that besides water temperatures favoring an active season, the Atlantic Multidecadal Oscillation (AMO) also points in this direction. He noted that the AMO has been in an active phase since 1995. MDA EarthSat Weather is forecasting 19 names storms to form this season with 12 of them becoming hurricanes. While 19 named storms doesn't compare to last year's 27, it is well above the average number of named storms in the Atlantic.

Colorado State University forecasters said in April that they expect 17 named storms, nine hurricanes, and five intense hurricanes (see NGI, April 10). In 2005 there were 27 named storms, 15 hurricanes and seven intense hurricanes. From 1950 to 2000 there would typically be 9.6 named storms, 5.9 hurricanes and 2.3 intense hurricanes. The National Oceanic and Atmospheric Administration is currently calling for 13-to-16 named storms, seven-to-10 hurricanes and three-to-five major hurricanes (see NGI, Feb. 6). The government forecasting firm is scheduled to release its new outlook on May 22.

AccuWeather meteorologist Joe Bastardi said earlier this month that the U.S. and the Gulf of Mexico in particular could be in real trouble this Atlantic hurricane season (see Daily GPI, May 4). Twenty or 30 years from now, Hurricane Katrina may be remembered as a "warning shot" for hurricane activity to come, Bastardi told a Houston audience of energy executives recently. The meteorologist added that historical patterns of hurricane activity lead him to believe that the next few years will see elevated hurricane activity in the Gulf. He predicted three or four major hurricanes in the Gulf over the next four or five years. "We're talking the area all the way from Key West [FL] to Brownsville [TX]," he said.

While those forecasts have sparked some fear in the energy industry, Weather 2000 last week warned that some of the hurricane forecasts predicting specific landfalls are only a form of grandstanding.

"The record-setting 2004 and 2005 Atlantic seasons sparked a lot of interest and concern about similar severity and destruction being the rule, as opposed to the exception, in the years to come," New York-Based Weather 2000 said. "Unfortunately, several entities have manipulated this fear to garner the spotlight, at the detriment to the public good, industry risk management and the meteorological science itself. Please know that no person or computer model can ever tell you where a hurricane is going, weeks before it even forms. Nor can any person or computer model ever tell you that a particular state or region will be definitely hit by a major hurricane, before a season even starts."

For the 2006 Atlantic hurricane season, Weather 2000 is looking for 15-22 named storms, eight-to-13 hurricanes and four-to-seven major hurricanes.

©Copyright 2006 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.

ISSN © 2577-9877 | ISSN © 1532-1266
Comments powered by Disqus