The US Energy Information Administration (EIA) announced on 10 June that they predict US oil and natural-gas production in the Gulf of Mexico is at low risk of hurricane-related production outages for the 2014 hurricane season.
The EIA short-term energy outlook forecasts production disturbances totaling 11.6 MMbbl of crude oil and 29.7Bcf of natural gas due to a less severe hurricane season. The disturbances amount to only 1.4 days of the estimated US oil production and less than half a day of the estimated US gas production for 2014. The seemingly manageable effect on US supply would not be as severe as in past years because the share of total US oil and natural gas production originating in the Gulf has declined sharply. Crude oil production in the Gulf accounted for only 17% of the US production in 2013, a significant decrease from the 27% it accounted for in 2003. Similarly in 1997 the Gulf accounted for 26% of the nation’s natural gas production, that share had declined to 5% by 2013.
Despite optimistic predictions, forecasting storm damage is inherently difficult because of the uncertainty surrounding the path a storm might take. A strong storm on the eastern seaboard likely won’t disrupt production in the Gulf, on the other hand, a more moderate storm whose path leads right through the middle of the Gulf and goes onshore along the Gulf Coast could cause significant harm to oil and natural gas production offshore.
Severe weather can affect other aspects of the energy market. The EIA does not model potential effects on energy demand, refinery operations, or storage facilities resulting from weather activity in their short-term energy outlook. EIA forecasts were made based on information released by the National Oceanic and Atmospheric Administration (NOAA).