Dear Readers,

With the first-half of 2010 on the verge of closing, continued positive movement is being seen in the economic conditions of the oil, gas and energy markets – the value of the U.S. dollar is rising, and the euro and yen have taken its place with some weakening.

While the terrible oil spill in the U.S. Gulf that resulted from the Deepwater Horizon rig explosion in April has not yet been resolved, and coastal wildlife and jobs are suffering, it seems the supply/demand ratio of U.S. crude is still well balanced and prices remain, as yet, unaffected. There could, however, be far more expansive consequences, such as the spill’s effect on the 2010 hurricane season in the U.S. Gulf, which began earlier this month.

According to an article contributed by Weather Trends International that was published in Hart Energy Publishing’s E&P magazine as well as Global Refining & Fuels Today newsletter, “From a purely physical standpoint, there are plausible scenarios that could either support enhancement or suppression of tropical activity. There are several arguments that support the likelihood of increased activity as a result of the spill:

• “the sheen at the surface will absorb more solar radiation, in the process increasing water temperature and leading toward a higher probability of hurricane formation over warm waters; and
• “the sheen is not one contiguous mass; so there will still be plenty of opportunity for an active pattern to emerge.

“There are arguments as well for less activity as a result of the spill:

• “the sheen will be thick enough at the surface to prevent significant evaporative convection of surface waters, thereby reducing fuel for storms to form/strengthen; and
• “thin streams of oil associated with the sheen can break or disrupt a system moving across the Gulf.”

While the author goes on to note the two types of oil slicks presently seen in portions of the Gulf and their likely impacts on a storm, “there is the possibility that the first or second major storm moving into the GoM [Gulf of Mexico] will disperse enough oil so that it will not have a significant measurable effect on the development of subsequent storms.”

But at the end of the day, the author notes, the billions of barrels of crude floating around U.S. Gulf are most likely not enough to create “the perfect storm.”

“As of today, it would be safe to assume that the spill will not significantly affect tropical system development or movement in the GoM during the 2010 hurricane season. Despite the areal extent of the spill, most medium-sized hurricanes are far larger in size. And the fact that the sheen is very fragmented (i.e. not one large oil slick covering a huge area) even weakens the argument that it will affect any tropical development. Sizable storms also have a tendency to form in the Atlantic, and then travel into the GoM, so by the time a system is traveling into the oil-affected regions, is already a well defined system with plenty of energy to make landfall somewhere along the Gulf Coast.” In a continuous endeavor to better understand your business needs and interests, we welcome community feedback to ensure we are providing the information to coincide with your busy schedules.

Thank you for your continued interest in and support of our publication, and we look forward to hearing more of your thoughts about your digital experience.

Until next time, safe travels, wherever they may take you.

Monique A. Hitchings
Editor-in-Chief
+1 713-260-6456
mhitchings@hartenergy.com