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Hurricane watch

Published Thursday, June 9th, 2016

A week into the Atlantic hurricane season and forecasters have been busy sounding the alarm that the coming months will be more active than those seen in previous years. At risk is the US Gulf Coast which is home to 45% of the country’s refining capacity and the single largest point of entry for oil imports. The region is also the epicentre of US offshore crude oil production and accounts for 1.4 mbpd or 17% of total US crude output.

For those that have exposure to oil facilities along the US Gulf Coast and are concerned over the potential for tropical storms in the area, historical evidence does not bode well. The US has been in the midst of a hurricane draught. No hurricane has made landfall since 2014 and the last three years have seen below average hurricane seasons. This has prompted many to predict that a major hurricane will strike the US this year and they argue that earlier tropical activity including the first formation of a hurricane in the month of January since 1938 provides a prescient warning signal.

Adding to the worrying outlook is the end of what has been called the most severe El Niño weather pattern since 1997 and, more importantly, anticipation that it will soon be replaced by La Nina. This weather phenomenon occurs every few years and forecasters currently attach a 75% probability that it will develop by the end of 2016. The reason why this is of concern is that it brings cooler conditions and reduced wind shear and is therefore more conducive to the development of tropical systems.

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Posted by Stephen Brennock

Stephen Brennock joined PVM in 2013 after having worked as a project manager for a business development firm. He graduated with a degree in Business Management in 2007.