The Hindu Business Line : Crude free from weather concerns

The warmer than normal winter in the northern hemisphere and suppressed hurricane activity in the tropical north Atlantic are expected to help insulate crude prices from the wild swings triggered by weather concerns.

Forecasts put out by various climate models suggest that the milder winter will keep the demand for heating oil in the US, the world's largest energy consumer, under check. Large parts of Europe are also likely to experience benign winter conditions this year.

FEWER HURRICANES

The current crude prices regime has also been influenced to a large extent by the suppressed hurricane activity in the tropical north Atlantic, which has ensured that oil farms in the Gulf of Mexico are functioning normally.

The hyperactive year 2005 hurricane season had caused crippling damages to the Gulf of Mexico facilities, which supply a lion's share of US' demand.

The season officially draws to a close on November 30.

Most forecasters who had bet on a busy hurricane season this year too have had to review their outlook, what with the unexpected emergence of the El Nino.

In this context, Business Line posed some queries to Mr Tony Barnston, Director, Forecasting, International Research Institute for Climate and Society, Columbia University. This is what he has had to say:

Is there a possibility that we are going to witness warmer than usual winters in future, or is this just an aberration?

Part of it has to do with the El Nino, which does tend to raise the mean temperature in the winter hemisphere, especially the northern hemisphere.

The tendency for a warmed climate would exist without El Nino also, but the El Nino tends to enhance it a little farther.

So, to some small degree, it is an aberration of this northern winter.

Do you think the surprisingly mellowed hurricane season had already prepared a platform for energy prices to head southward?

That probably did lower energy prices also, due mainly to the psychology, but also to the real lack of damage to the energy industry by the reduced hurricane activity (due also to the El Nino, at least partly).

Which brings us to the crucial question — why did the hurricane season fail forecasters in the manner it did this year? Was it just the El Nino and suppressed hurricane activity?

It was definitely the late-developing (and therefore partly unexpected) El Nino. Also there was considerable tropospheric subsidence, and therefore dry air and dust over the main development region of the north tropical Atlantic. This had not been expected.

This hardly, but just slightly, overlapped with the emergence of the El Nino.

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