End of the 2009 Hurricane Season

November 30 marks the end of Atlantic Hurricane Season which began back in June.  This has been an extremely mild season with only one (Hurricane Ida in early November) hurricane shutting down a small amount of US Gulf Coast oil and gas production for a few days.  Not a single hurricane made US landfall in 2009.

Comparing storm activity from one year to the next is a challenge.  Do you use lives lost, number of named storms, dollar damage, volume of oil and gas production shut in, or maximum intensity?

Taking a leaf from Google's attempt to analyze flu using words typed into its search engine, here are two charts which I am updating for the last time this year comparing the 2009 hurricane season to previous ones.  The first chart shows how many searches for the word "hurricane" were carried out over the past six years. The 2005 season which included Hurricane Katrina stands out.  Interestingly, the Google index registered a ZERO for the week up to November 29, 2009.  This is the first time the data showed no value.

(click chart to enlarge)

A second chart shows the same data as above, except in a cumulative form with the end of 2005 indexed to 100:

(click chart to enlarge)

The effects of seasonality on oil are described in Oil 101.

Hurricane Ida

(click here for updated Ida path)

This has been a very mild hurricane season for US Gulf Coast oil and gas production and refineries. Until yesterday there were no shut ins of production or refinery ouput due to hurricanes in 2009. Hurricane season ends on the last day of November and so Hurricane Ida is relatively late in the season. Ida is passing through an area in which oil and gas is produced and refined, which is why some companies are taking precautionary action.

Update: Monday Nov. 9th, 6:25pm. The US MMS says 384,642 barrels of oil production and 1.925 BCFD natural gas production shut in by Ida. This is roughly one quarter of US Gulf Coast offshore production.

Assuming no damage and that staff are back on platforms by Tuesday afternoon, it is likely that output will be shut down for a total of 2-3 days production. 

Click on the link here to see an amazingly detailed NASA image of the storm.

Oil and the White Swan Non-Event

The expected continues not to happen.

Black swan events tend to be thought of as low probability events which occur. There can also of course be events which are highly expected (White Swans ?) but which do not occur.

As a result of the 2005 hurricane season, 166 million barrels cumulatively were shut in. That was an extreme year for tropical storms. The 2009 hurricane season is now looking as if it will be the other extreme with no oil and gas production shut ins so far.

The US EIA carried out an analysis earlier this year and assigned a 4% probability to the 2009 hurricane season resulting in no shut ins. The EIA forecast a total cumulative shut in value of 4.5 million barrels of crude to be shut in. So far there has been no US Gulf Coast shut ins. The following chart of Google searches for the word hurricane (updated to Sep 13, 2009) nicely reflects the benign nature of the 2009 hurricane season to date.

Ranking the 2009 Hurricane Season

As described in Oil 101, hurricane season begins on June 1 and ends November 30.  The oil market watches its progression closely as Atlantic hurricanes can shut in and damage oil production and refining infrastructure in the Gulf of Mexico.  Most oil supply and demand forecasting models assume an "average" hurricane season until about this time when they begin to be rapidly recalibrated.

At the half-way point of the 2009 season it is time to take stock.  So far in 2009 we have only seen one hurricane (Bill) and four named tropical storms.  At this stage in 2008 we had already seen four hurricanes (Bertha, Dolly, Gustav and Hanna).  By this time in record setting 2005, we had witnessed five hurricanes (Cindy, Dennis, Emily, Irene, and Katrina).

Using a different method of putting the 2009 hurricane season in perspective, following is a chart of google searches for the word "hurricane" over the past six years.  The chart correlates well with the number and severity of hurricanes.

Chart based on search data from Google.

Ana - First Tropical Storm of 2009

This morning at 4am EST the first tropical storm of the season, Ana, was named by the US National Hurricane Center (NHC). We haven't had any hurricanes yet this season. The sequence of hurricane development is:

Tropical Depression -> Tropical Storm -> Hurricane

Topical depressions are given numbers. Tropical storms and any subsequently developing hurricanes are given names in alphabetical order which switch from mens to womens names every other year. There are six lists of names (3 mens and 3 womens) which cycle every six years. The names were exhausted once in 2005. Tropical storms and hurricanes are given letters from the Greek alphabet when the list of names runs out.

Hurricanes are important to the oil market as they can shut down production and refining located in the Gulf of Mexico.

Updates:
1: 4pm EST Sat. the second Tropical Storm, Bill, named.
2: 12:15pm EST Sun. the third Tropical Storm, Claudette, named.

(click on graphic above to obtain the lastest NHC update)

Blue Skies...But Not For Long

Two months have passed since Hurricane Season started back on June 1. We haven't had any hurricanes or named tropical storms yet. Hurricane season peaks in the first week of September before ending on the last day of November. Oil markets keep a keen eye on any storms or hurricanes because they disrupt oil production off the US and Mexican gulf coasts.

Warm up your hyperlink to the US National Hurricane Center. There are usually 2 named tropical storms in August and 3 in September.

Storms on the Horizon

Hurricane Season begins on June 1 and lasts until November 30. The peak is generally in the first week of Semptember. A large portion of US oil and gas production, refining, storage and importing facilities are located along the US Gulf Coast where many hurricanes and tropical storms pass through. Seasonality of all types is described in Oil 101.