Active hurricane season expected to increase volatility - Jeffries

05 April 2013 19:14  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--An active hurricane season this year will increase risks of volatility in energy markets, Jeffries analyst Laurence Alexander said in an industry note on Friday.

Current models suggest a more active season, with three to five major hurricanes compared with the usual two, the note said.

The storms are forecast to be more frequent and more severe, Alexander said.

The US Gulf is home to about 27% of the country's oil and 15% of its natural gas production, according to the US Department of Energy (DOE).

Hurricanes threaten offshore drilling and petrochemical and refining assets located on the Gulf Coast. The shutdown of these assets generally causes product shortages and price spikes, in addition to facility damage.

"Water temperatures in mid-summer will be the tell for whether there's more risk for the Gulf Coast or northeast," Alexander said in the note.

By: Leela Landress
+1 713 525 2653

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