Summary
WSI's public hurricane forecasts are watched by many risk specialists, especially in the energy & insurance industries. Since WSI is calling for less of a hurricane threat in the Western Gulf -- where the majority of the oil and natural gas interests lie -- and because more forecasters are copying (for lack of a better word) the decreased total number of storms predicted -- it is increasingly more likely that oil prices will become more volatile in the next 60 days (through early October) -- contrary to the climb that has occurred over the past 60 days. That is, one might expect Bearish trends occurring before hurricane activity occurs, then sudden Bullish activity when a hurricane does threaten the Western Gulf. Buying into decreased hurricane predictions -- when the scientific factors to make hurricanes in the first place are becoming more conducive for a sudden increase in storm development -- is not advisable at all. Of course, Mother Nature will tell us all very soon.
Analysis
Because the season has not been very active so far, and especially since many original forecasts in April were calling for the 2007 hurricane season to be "exceptionally active", many companies as well as ordinary folks along the USA coastline are thinking that this year will be similar to 2006. There are triple the number of reasons why 2007 will be more active than 2006, and I believe the sudden ramp-up in activity will catch many off-guard.
The forecast total number of named tropical storms is becoming an increasingly irrelevant statistic. Of course, all it takes is one major landfalling hurricane in a populated area, even if a year has less than normal tropical activity. In addition, there have been many seasons in the past when below normal tropical activity through August 1 has produced an above normal number of destructive landfalling hurricanes during the remainder of the tropical season from the Western Gulf to the Mid-Atlantic coastline. Just look at 2004 -- one of many year examples -- to understand a more memorable example when FL was slammed by 4 hurricanes after August 1.
Contrary to both the majority of forecast companies in the public and private domains that are decreasing the total number of named storms to form in 2007, I am still forecasting a sudden ramp-up in tropical activity in the Atlantic / Caribbean & Gulf of Mexico from August 15 through October 30 with a rapid succession of named storms expected. In addition, it is increasingly likely that there will be sudden intensification of future hurricanes this year, especially closer to the coastline than normal, making it a "challenging period" economically most likely between September 15 and November 5 as the waters become warmer than usual later in the season this year.
