It's that time of the year again -- the start of the Atlantic hurricane season. Running from June 1 through Nov. 30, this season is a bit different than most. This is the first season where oil is above the $100 a barrel mark and the start of the season finds a natural gas market that is very vulnerable as the market is even more dependent now on domestic production. And a huge part of the domestic gas production still comes from the Gulf of Mexico. As a historical note, before hurricanes Katrina and Rita in 2005, gas prices averaged $6.789/MMBtu. The real pain for consumers that year came in December when prices peaked at $15/MMBtu. Now, natural gas prices are in the $11/MMBtu range. Oil and natural gas producers went through 2006 and 2007 without any major damage. But the fly in the buttermilk this year is that because of a cold winter, natural gas stocks in the U.S. are 16% down from last year at the start of the storm season. And disruptions could have a serious ripple effect across the entire country. With supply concerns like that, energy producers are keeping a weather eye on the Gulf of Mexico and the Atlantic basin. And the forecast for this year? That's like asking who is going to win "American Idol" at the start of the season. Depends on who you talk to. The National Oceanic and Atmospheric Administration said there is a 65% chance of an above-average storm season with 12-16 named storms, including two to five that will become major hurricanes with winds above 111 mph. In Houston, the Weather Research Center has a forecast that calls for 11 named storms with six becoming hurricanes with a season lasting well into December. The Center has gone a little bit beyond what many of the forecasters are saying by issuing specific target locations for the storm season. According to Center President Jill F. Hasling, the area from Georgia to the Carolinas has a 90% chance of experiencing a hit by a hurricane or tropical storm. And the same goes for the Gulf of Mexico. "No matter who is making the forecast, it only takes one major storm to cause a real problem," Hasling said while at the Offshore Technology Conference 2008, held recently in Houston. "Everyone has used the last few years to recover from Katrina and Rita and get ready for whatever comes. Hopefully it will be another quiet year, but it doesn't look like it." John A. Sullivan, News Editor, Oil and Gas Investor, www.OilandGasInvestor.com, firstname.lastname@example.org
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