How Atlantic Hurricanes Influence The Price Of Oil
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Recently, the price of oil has once again dominated the headlines as some places around the United States are seeing gas stations charge $3.00 per gallon of regular gas, and even more for unleaded. Here in New Jersey, the cheapest gas you can find is $2.38 per gallon. Prices in Central Jersey are as high as $2.61 per gallon of regular, and $2.81 per gallon of premium. A barrel of crude oil has been as high as $67 dollars, and some experts and analysts such as T. Boone Pickens say that the price of oil will reach $100 per barrel very soon.

There are a wide variety of reasons for the rise in the price of oil over the past several years. One obvious reason is the continued instability in the Middle East. As long as there is conflict between the Israelis and the Palestinians, terrorist attacks, and U.S. intervention in such places as Iraq and Iran, the price of oil will be affected. History has always taught us that with the 1973 Oil Crisis resulting from the problems surrounding the Yom Kippur War, and the 1979 Oil Crisis, which came about from the Iranian Hostage Crisis and the Soviet Union's invasion of Afghanistan.

Other reasons are the United States continued dependence on foreign oil, America's fascination with big cars, lack of new oil refineries, and yes...Atlantic Tropical Storms and Hurricanes. Tropical Storms and Hurricanes? How is that? Well, there are many offshore oil rigs throughout places such as the Gulf of Mexico, and if a tropical storm or hurricane is in the vicinity of such rigs, personnel has to be evacuated and production halted, which disrupts overall oil production and supply.



Facts About The Oil Crisis

Hurricanes can have an impact to many aspects of everyday life not only for coastal residents directly impacted by such storms, but also people living well inland, and even in another part of the country. For instance, when Hurricane Emily closed in on the Northeastern Coast of Mexico last month, employees of Mexico's primary oil company, PEMEX, had to evacuate offshore facilities. Earlier in the season both Tropical Storm Cindy and Hurricane Dennis disrupted production on U.S. offshore rigs in the Central Gulf of Mexico. Last season, Hurricane Ivan's fury also impacted the same area. The disruptions caused by these storms had an impact on the increase in the price of oil over the past year.

In addition, the forecasts issued by both Dr. William Gray of Colorado State and NOAA have been a cause for great uncertainty and anxiety in oil markets. Both forecasts indicating a record breaking season in 2005 has many involved with oil concerned. Each of the updated seasonal forecasts indicated a significant number of named storms, hurricanes, and major hurricanes. Anywhere from an additional 7 to 9 named storms are expected on top of what was previously predicted making the forecast total of storms between 18 and 21 for the 2005 season when it all ends in November (that's if it does indeed end in November!). Moreoever, nine to eleven of those named storms could become hurricanes, and five to seven of the hurricanes could be intense (Category 3 or higher on the Saffir-Simpson Scale).


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Oil And Hurricanes

The reason for the concern is that tropical storms and hurricanes generate a lot of wave energy. As a matter of fact, there is an article in the August, 2005 Bulletin of the American Meteorological Society that talks about the impact of ocean swells and waves from Hurricane Isabel back in 2003. Isabel, which actually holds the record for highest wind recorded in a hurricane with 203 knots or approximately 234 miles per hour, generated swells up to 16 feet off the Florida coast, and waves between 8 to 14 feet in some of the beaches on Florida's East Coast.

The higher the winds are, the greater the wave heights and wave energy. We all know what storm surge is and what it does. The surge, which is the dome of water that is associated with a hurricane, is responsible for 90 percent of all deaths in a hurricane. It also shouldn't be confused with waves although wave action contributes to storm surge. High waves and rough seas not only cause beach erosion, and hazardous swimming conditions, but they also can cause damage to oil rigging platforms and oil tankers that are offshore.


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The Consequences For Oil

When oil rigs and tankers are damaged, there is a disruption in production and/or the distribution of oil, which is then reflected by a rise in oil prices that eventually comes back to bite many consumers at the gas pump. Similarly, when there is a global crisis, particularly one in the Middle East, prices are affected. For example, ongoing negotiations between members of the European Union, the IAEA, and Iran over the activation of a nuclear plant has influenced the price of oil.

In addition, there have been problems in distribution. Just in the past month, there have been a number of fires at oil refineries around the United States, which has added to the price of oil and gas. So, as you can see, with the forecast for a well above average to record breaking Atlantic Hurricane Season, there is another thing to worry about when you go fill up at your favorite local gas station. In addition, the impact of storms on the price of oil is another way to show how tropical cylones can affect many different aspects of our lives even if they do not directly impact us.


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