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Forecaster Cuts 2007 Hurricane Outlook

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Published at: today.reuters.com

Simon AtkinsCEO, Senior Industrial Disaster Threat ForecasterAdvanced Forecasting Corporation

Buying Into Decreased Hurricane Predictions Is Not Advisable

August 3, 2007

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.