NEW YORK (MarketWatch) — With oil at record highs grabbing everyone’s attention, investors in energy stocks are already turning to the Atlantic Hurricane season to determine which firms will benefit and which will lose.

Even a slight disruption to production facilities in the Gulf of Mexico could push oil prices to even higher stratospheric levels, unleashing more dislocation in the energy sector: Hurting some oil and gas producers and refiners while benefiting oil players, such as aftermath service providers, analysts said.

The Gulf of Mexico accounts for about 32% of U.S. crude oil production and 15% of natural gas output.

“The hurricane season can affect the [energy] sector dramatically. It’s all about the fear factor.”

Beth Sewell, Quantum Gas & Power Services

“The hurricane season can affect the [energy] sector dramatically. It’s all about the fear factor,” said Beth Sewell, managing partner of Quantum Gas & Power Services. “As a storm comes, traders will always trade on the uncertainty and trading goes through the roof.” In August 2005, Katrina — the costliest hurricane in U.S. history — damaged or destroyed 30 oil platforms, closed nine refineries and slowed operations at about 10 others. Six months after Katrina, the total shut-in oil production from the Gulf of Mexico was about 24% of the annual production and that for gas production was about 18%.

Rita, which rolled by a month later, was feared to push gasoline prices up to $5 a gallon, but it eventually turned out not to be as severe as anticipated.

Esa Ramasamy, Platt’s director of America’s oil market reporting team, said the hurricane season tends to be bullish for oil prices and the overall marketplace. But the magnitude of its impact is hard to predict. “You’re gambling with nature, and who knows what nature will turn out to be.”

Remember that’s this war in the skies has always been about control, subversion of the populace, and profit. Always. Soon the financial markets will will have to contend with another ’bout’ of Nature. Oh really? It has been 30+ years since it has been Nature that has controlled the weather. Extreme profits are in store for those in the know this hurricane season. –Scott Stevens

Now on to the drought, that is where it isn’t presently flooding…

National Drought Summary — June 24, 2008

The discussion in the Looking Ahead section is simply a description of what the official national guidance from the National Weather Service (NWS) National Centers for Environmental Prediction is depicting for current areas of dryness and drought. The NWS forecast products utilized include the HPC 5-day QPF and 5-day Mean Temperature progs, the 6-10 Day Outlooks of Temperature and Precipitation Probability, and the 8-14 Day Outlooks of Temperature and Precipitation Probability, valid as of late Wednesday afternoon of the USDM release week. The NWS forecast web page used for this section is: http://www.cpc.ncep.noaa.gov/products/forecasts/.

An upper atmospheric high pressure center persisted over southern Arizona and New Mexico during this U.S. Drought Monitor (USDM) period. This resulted in a dry week throughout most of the West. Rain throughout the country’s mid section moved south out of Iowa, bringing some much needed relief to areas of the central and southern Great Plains. Areas of the east coast saw sporadic rainfall with the exception of southern Florida where above normal rainfall persisted for a second week.

The Northeast: Cool temperatures dominated the Northeast this week. These temperatures, combined with locally intense precipitation from Maine (over 4.5 inches in places) to Long Island Sound (up to 2.5 inches), led to the issuance of flood advisories. The sporadic precipitation contributed to a reduction in areas of abnormal dryness in the region, however, longer term impacts are still being felt in streamflow and groundwater.

Mid-Atlantic and Southeast: Summer heat was largely absent this week with almost all Mid-Atlantic and Southeast temperatures falling below normal. Much of the Tennessee and Ohio Valleys were at least 4 degrees Fahrenheit cooler than normal. Coastal Georgia and northeast Florida were the exception to this rule with temperatures just slightly above normal. Precipitation was primarily associated with scattered to isolated showers and thunderstorms again this week. Rainfall totals varied widely with the southern Atlantic coast of North Carolina, much of the South Carolina coast, and most of southern Florida receiving two to three times their normal precipitation. Miami received over seven inches of rain in the last week. This moisture helped abate the drought in southern and southwest Florida with decreases in both the moderate (D1) and severe (D2) conditions there. Long-term ground water levels are still low throughout the state. Conversely, conditions in North and South Carolina, throughout Georgia, and into Alabama continue to decline. Areas of moderate (D1), severe (D2), extreme (D3), and exceptional (D4) drought expanded last week. Most of Georgia is now covered by severe drought or worse.

The Plains and Upper Midwest: Heavy rains, severe weather, and flooding again were present throughout Plains and upper Midwest. Hail, wind, or tornadoes were reported in every state in the area. Beneficial rains again fell in western North Dakota, reducing the areas of moderate (D1) and severe (D2) drought there. Additional beneficial rains fell in north central Texas and southwest Oklahoma reducing areas of moderate (D1) drought and abnormal dryness (D0).

Rainfall largely evaded the Oklahoma panhandle again this week leaving exceptional (D4) drought in place. Conditions worsened along the Texas coast south of Houston. Extreme (D3) drought expanded there as well as in a few counties west of the area. Likewise this week, Arkansas began to see abnormally dry conditions (D0) along its eastern border.

Impacts of drought are evident in Texas agricultural conditions. The percentage of Texas corn in poor to very poor condition increased from 20% last week to 27% this week. Conditions also degraded for sorghum (26% rated poor to very poor this week versus 23% last week), cotton (38% versus 35% last week), winter wheat (54% versus 47% last week), and rangelands (47% versus 40% last week). Conversely, increased rainfall likely improved conditions for peanuts (10% rated poor to very poor versus 18% last week) and oats (22% this week versus 25% least week).

The West: In the West, weekly precipitation above 0.5 inches was limited to local areas of south-central and eastern New Mexico, northeastern Washington, northern Idaho, southern Montana, and eastern Wyoming. Most of the West received no rainfall which is not unusual for this time of year. Locally, exceptional (D4) drought was alleviated to a small extent in northeastern New Mexico.

Fires throughout the West increased dramatically this week, especially in northern California where 800 fires were started over the June 21-22 weekend by dry lightning strikes. As of June 25 there are 33 active wildfires in California which have consumed nearly 190,000 acres. Additional fires in Arizona and New Mexico have consumed another nearly 100,000 acres. According to the National Interagency Fire Center, 2008 has already surpassed the 5 and 10 year averages for acres burned but have done so with fewer fires, indicating larger fires this year, on average.

Hawaii, Alaska and Puerto Rico: Below normal precipitation continued across much of Hawaii this week. Likewise, temperatures were mostly cooler than normal. Drought conditions remain unchanged from last week.

Across Alaska, precipitation was near or slightly below normal. Drought conditions remain unchanged.

Rainfall fell over most of Puerto Rico this week. Precipitation varied from intense in the northwest part of the island to light along much of the south and interior. Rainfall amounts were generally well below normal however, longer term precipitation totals are near normal. Areas of drought remained unchanged.

Looking Ahead: June 26–30, 2008, heat continues to build in the West as temperatures near or warmer than normal are expected from the Mississippi River to the Pacific with the exception of the California coast. The Mid-Atlantic is also expected to see above normal temperatures. Below normal temperatures are forecast for areas near the western Great Lakes and along the Gulf of Mexico. Moderate to heavy precipitation (0.5 to 2+ inches) is forecast from the northern High Plains through the upper Mississippi and Ohio Valleys and into New England, as well as along the Gulf of Mexico. Light precipitation is again forecast west of the Rockies.

For the ensuing 5 days (July 1-5, 2008), the odds favor continued above-normal temperatures across most of the West (with the exception of the extreme Southwest), the western Plains, the upper Mississippi Valley, and along the Mid-Atlantic coast from southern New Jersey to northern Georgia. Below normal temperatures are favored around the lower Great Lakes and throughout most of southern Alaska. The odds also favor above normal precipitation along the Atlantic seaboard and the Gulf of Mexico. Additional smaller areas of above normal rainfall are expected in Colorado, New Mexico, and southeastern Alaska. Below normal precipitation is forecast for the northern Plains, the upper Mississippi Valley, and in northeast Alaska.

Author: Mike Brewer, NOAA/NCDC

Food and energy, are two of the most important components of our economic lives, both stripped out of the core inflation numbers… These two necessities of life are crucial economic components that are very quickly going into crisis/acute shortage status because of this planets “weather”, or, to the unaware, acts of God. Nothing could be further from the truth.

Prepare folks for a bumpy Atlantic hurricane season…

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