Conditions are becoming increasingly favorable for the development of an El Niño. On June 4, 2009, the National Oceanic Atmospheric Administration (NOAA) issued an El Niño Watch indicating that conditions are favorable for a transition from neutral conditions to El Niño conditions during June-August 2009. Depending on the strength of an El Niño, it can cause a dramatic shift in summer and winter weather patterns, as well as tropical storm and hurricane patterns.
“The increasing potential of an El Niño development has been a primary reason why many weather forecasters have trimmed back their predicted number of Atlantic-basin tropical storms this year,” says Valerie Wood, President of Energy Solutions, Inc. “Tropical storm and hurricane development is more likely when ocean waters are warm and trade winds are weak. Warmer waters act as a fuel for topical storms or disturbances, aiding their intensification and weaker trader winds are less likely to be capable of breaking apart tropical storms. An El Niño development means cooler than normal ocean temperatures, which won’t provide the necessary fuel for a storm to intensify, and stronger trade winds, which will more easily inhibit spinning motions and slow or halt storm formation.”
The most recent El Niño was in 2006, a season in which there were nine named storms. The last very strong El Niño was in 1997, a season in which there were only seven named tropical storms (and one unnamed subtropical storm). By comparison, there were 16 named storms in 2008. “While an El Niño could ultimately be bearish for natural gas prices, when it comes to hurricane season, the market will take a wait-and-see approach because a strong El Niño brings with it some known weather patterns, whereas a weak El Niño can become a meteorologist guessing-game,” says Wood. “So, any bearish price impact caused by a reduced number of tropical storms this year isn’t expected to show up in prices until late-summer or early fall.”
Natural gas buyers can stay up-to-date with these types of price-moving events through The Advisor, which contains long and short-term natural gas pricing outlooks and other valuable tools and insight to assist in a company’s natural gas buying decisions. With 12 monthly editions, 48 weekly editions, and ongoing alerts and educational analyses, natural gas buyers will be pleasantly surprised at how cost effective this publication is. Remember, knowledge is power," says Wood.
For a free copy of the recently issued June edition of The Advisor, send your request to june-request@energysolutionsinc.com or call (608) 848-9589.
