Hypothetical Hurricanes Causing the Price of Oil to Rise

[marmar]

from Bloomberg:



Oil Rises on Forecast of Worse-Than-Average Hurricane Season

By Alexander Kwiatkowski

May 23 (Bloomberg) -- Crude oil rose, headed for a third weekly gain, after a report forecast that the 2008 hurricane season may be more active than usual, threatening oil platforms and refineries in the Gulf of Mexico.

The 2008 season, which begins on June 1, may have as many as nine hurricanes forming in the Atlantic Ocean, more than average, the National Oceanic and Atmospheric Administration said in a report yesterday. Crude prices rose to a record yesterday spurred by concerns about long-term supply.

``The prospect of a more active hurricane season is at the back of people's minds, keeping the market up,' said Robert Laughlin, a senior broker at MF Global Ltd. in London.

Crude oil for July delivery rose as much as $2.33, or 1.8 percent, to $133.14 a barrel on the New York Mercantile Exchange. It was at $132.92 a barrel at 12:18 p.m. in London.

Yesterday, oil fell $2.36, or 1.8 percent, to settle at $130.81 after reaching $135.09 a barrel, the highest since futures started trading in 1983.

At the lower end of the NOAA's forecast, as few as six Atlantic hurricanes may form, including two major ones, which would make 2008 an average storm year. In the past two years, NOAA predictions have overestimated the number of hurricanes.

``It's the first look at what might happen,'' said Barbara Lambrecht, an analyst at Commerzbank AG in Frankfurt. ``The hurricane outlook is a bit better than last year but a bit stronger than average.''

Hurricane Katrina

Oil prices surged in the summer of 2005 after hurricanes Katrina and Rita destroyed Gulf Coast oil platforms and refining facilities. Together, the storms caused more than 109 million barrels of crude oil, about a fifth of annual Gulf of Mexico oil production.

The agency predicted 10 hurricanes last year, and only six formed. In 2006, NOAA forecast as many as nine hurricanes and only five were recorded. In 2005, the government forecaster underestimated storm activity. .......(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=aJY7qM4HKq5o&refer=home

[babylonsister]

1. This is such bull poop! The same thing happens every year,

and we don't get hurricanes every year. The prognosticators always err on the side of caution and are often wrong. :mad: