Busy Hurricane Season Ahead, Higher Gas Prices on the Way: Paul Walsh
Hurricane season is upon us.
From now until mid-November those living along the East Coast and Gulf Coast of the U.S. will be paying special attention to weather forecasts, hoping that no major storms hit.
Last year's Superstorm Sandy had a disastrous impact in the Northeast. It was the deadliest storm in 40 years with an estimated economic cost of $50 billion so far -- the recovery process is still ongoing. The previous year's Hurricane Irene also left the economy reeling with an estimated cost of $10 billion.
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While Weather Channel analyst Paul Walsh predicts that this will be a storm-heavy season, he doesn't forecast any hurricanes on extreme scales. "The prediction is for an active year, though the trend for the forecast has gone down," he tells The Daily Ticker.
Walsh believes that the first big storm of the season may even hit the Gulf Coast region later this week. A Tropical Depression is currently being tracked along the Gulf of Mexico and could hit land by Saturday.
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Although the storm isn't expected to cause widespread infrastructural damage, it could cause a temporary spike in oil prices. "If you start to see a large storm track into the central or western part of the Gulf, that will immediately impact the expectations in terms of oil prices, so we’ll see oil prices spike pretty quickly," says Walsh.
A spike in oil prices, however temporary, means gas prices will rise as we head into one of the most heavily traveled periods of the year. "When oil prices spike you could see short term reactions in the price of gas."
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Even if the storm doesn't materialize, expect any and all weather prognostications to hit the pump hard, "the prices generally move, just like the price of corn, on weather forecasts," says Walsh.
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