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Hurricane Watch

  • #1
  • First Post: Edited Aug 28, 2019 10:38pm Aug 26, 2019 8:33pm | Edited Aug 28, 2019 10:38pm
I'm starting this thread to keep track of Dorian. Here's what the models are showing:

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Notice a few models take it across Florida and into the Gulf of Mexico. Should that happen, the potential exists for an energy supply disruption and a big spike in prices. In order for this to happen, first it needs to get past Hispanola and then it needs to take a southern track either under Florida or at least south of Palm Beach County. Its a low probability event at this point, but its worth keeping an eye on.

Update

I'm updating this post to provide some useful resources for tracking the storm.

Official NHC track: https://www.nhc.noaa.gov/storm_graph...e_and_wind.png

Euro Model: https://www.tropicaltidbits.com/anal...cmwf&region=us

Best all around site: https://spaghettimodels.com/
Self-sufficiency is the greatest of all wealth. - Epicurus
  • #2
  • Aug 27, 2019 10:59am Aug 27, 2019 10:59am
Models have been trending north. It looks less likely that Hispanola will break up the storm, but at the moment it looks less likely.

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A few rogue plots still take it into the Gulf.

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So far the models aren't agreeing at all on intensity. I think we learned last year from Michael that intensity forecasts can be subject to quite a bit of error.

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Self-sufficiency is the greatest of all wealth. - Epicurus
  • #3
  • Aug 27, 2019 2:26pm Aug 27, 2019 2:26pm
Great thread! I've been under the impression that Hurricane Dorian might put upward pressure on crude on any supply disruptions but check this out: https://www.energyexch.com/showthrea...5#post12468245
We must learn who is gold, and who is gold plated
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  • #4
  • Aug 27, 2019 2:41pm Aug 27, 2019 2:41pm
Could anyone put some scenarios out there? For Example.. if it hits at "LEVEL X" at .... OIL might go up/down by... %.. etc?
As it's effects on OIL were suggested in another thread...
Should anyone do this.. I might contribute to modelling its path/strength.. have done this before btw... quite successfully so...
Can you afford to take that chance?
  • #5
  • Aug 27, 2019 3:07pm Aug 27, 2019 3:07pm
Quoting auricforecas
Could anyone put some scenarios out there? For Example.. if it hits at "LEVEL X" at .... OIL might go up/down by... %.. etc? As it's effects on OIL were suggested in another thread... Should anyone do this.. I might contribute to modelling its path/strength.. have done this before btw... quite successfully so...
don't bother... just concluded (forecasted), it might (high chance) very well slow down and/or move...
Can you afford to take that chance?
  • #6
  • Aug 27, 2019 4:29pm Aug 27, 2019 4:29pm
Quoting auricforecas
Could anyone put some scenarios out there? For Example.. if it hits at "LEVEL X" at .... OIL might go up/down by... %.. etc? As it's effects on OIL were suggested in another thread... Should anyone do this.. I might contribute to modelling its path/strength.. have done this before btw... quite successfully so...
I think that may be difficult to figure out. My understanding is that the gulf energy industry made a lot of changes after Katrina so hurricanes won’t ever impact operations to that extent again. Harvey could be a good one to look at, but I don’t think Dorian will make it all the way to TX.
Self-sufficiency is the greatest of all wealth. - Epicurus
  • #7
  • Aug 27, 2019 4:32pm Aug 27, 2019 4:32pm
I see some models are ramping up the intensity as it hits Florida.

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980mbs is consistent with a Cat 1 so the above models are showing something like a strong Cat 1 or weak Cat 2 impacting S Florida. I wouldn’t be surprised if it ends up stronger.
Self-sufficiency is the greatest of all wealth. - Epicurus
  • #8
  • Aug 27, 2019 8:50pm Aug 27, 2019 8:50pm
[dup from WTI thread]

If Dorian crosses Florida into the Gulf of Mexico, offshore rigs will be closed and evacuated, and some refineries typically shutdown for a while. Not a big thing on the national/global scale, but traders often make an issue of it. (Being from South Florida, I'm obviously an expert on the matter )
  • #9
  • Aug 28, 2019 3:13pm Aug 28, 2019 3:13pm
Quoting timingchain
(Being from South Florida, I'm obviously an expert on the matter )
Timingchain! I've spent some of my life down there too. I'm a Hurricane Andrew survivor. We do become experts on hurricanes at an early age.

I was certain that when hurricanes hit the gulf the supply disruption supports oil prices. Either 2018 is a bad sample, or there's a buy the rumor sell the news effect associated with these hurricanes. I'm not sure. I know you saw the post I made yesterday, but for anybody else it's here: https://www.energyexch.com/showthrea...5#post12468245. It was a really surprising finding.

Quoting timingchain
[dup from WTI thread] If Dorian crosses Florida into the Gulf of Mexico, offshore rigs will be closed and evacuated, and some refineries typically shutdown for a while. Not a big thing on the national/global scale,
As you know, they always over-hype the hurricanes. It's probably by design and it's better to over prepare anyways.

Dorian is expected to hit as a Category 3. That's a pretty big deal, especially if it hits a big city. Check out this graph:
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BUT... I don't have to tell you that with almost a week until 'predicted landfall', that's an eternity. There's one thing I can guarantee. The graph from NOAA at this point is 100% what's not going to happen. They can't and never predict any storms accurately seven days out.

I've always used these guys: https://spaghettimodels.com/
We must learn who is gold, and who is gold plated
EventsTrader Live All Time Return: 54.4%
  • #10
  • Aug 28, 2019 5:28pm Aug 28, 2019 5:28pm
Quoting EventsTrader
{quote} Timingchain! I've spent some of my life down there too. I'm a Hurricane Andrew survivor. We do become experts on hurricanes at an early age. I was certain that when hurricanes hit the gulf the supply disruption supports oil prices. Either 2018 is a bad sample, or there's a buy the rumor sell the news effect associated with these hurricanes....
ET, I rode out Andrew in Miami, about 5 miles north of the very worst of it. The current projected track for Dorian goes over where I live, but, as you wrote, it is highly unlikely to get here. That was a great analysis of oil price behavior. Buy the rumor, sell the fact sounds very plausible.
  • #11
  • Edited 6:17pm Aug 28, 2019 5:53pm | Edited 6:17pm
Quoting EventsTrader
I've always used these guys: https://spaghettimodels.com/
Yep, this is the best site I've seen for hurricanes. I edited my first post of the thread to add this in, along with some other useful tracking resources.

Quoting timingchain
{quote} ET, I rode out Andrew in Miami, about 5 miles north of the very worst of it. The current projected track for Dorian goes over where I live, but, as you wrote, it is highly unlikely to get here. That was a great analysis of oil price behavior. Buy the rumor, sell the fact sounds very plausible.
What part of S Florida are you in now? The last Euro run has Dorian making landfall further south than what the NHS shows; somewhere around Boca Raton. As you both have said, it's too early to have any real precision with this.
Self-sufficiency is the greatest of all wealth. - Epicurus
  • #12
  • Aug 28, 2019 6:35pm Aug 28, 2019 6:35pm
Quoting Ef5
{quote} Yep, this is the best site I've seen for hurricanes. I edited my first post of the thread to add this in, along with some other useful tracking resources. {quote} What part of S Florida are you in now? The last Euro run has Dorian making landfall further south than what the NHS shows; somewhere around Boca Raton. As you both have said, it's too early to have any real precision with this.
I'm in N Florida now. Some hurricanes have followed me up here.
  • #13
  • Aug 28, 2019 10:37pm Aug 28, 2019 10:37pm
Quoting timingchain
{quote} I'm in N Florida now. Some hurricanes have followed me up here.
Looks like you're still in the cone, but I'm hoping Dorian passes well to your south.
Self-sufficiency is the greatest of all wealth. - Epicurus
  • #14
  • Aug 28, 2019 11:47pm Aug 28, 2019 11:47pm
Instensity guidance has shifted higher since I last saw:
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Also, last update shows Florida being directly hit:
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This is all that's forecasted so far:
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Nobody knows but at least with this one you get to see all the predictions:
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We must learn who is gold, and who is gold plated
EventsTrader Live All Time Return: 54.4%
  • #15
  • Aug 29, 2019 3:04am Aug 29, 2019 3:04am
Woah EF5! What a great live-coverage thread! I'm in the Alabama area so while Dorian may not impact us with full force, we may get a little wet

Great sources!

Currently, Dorian is slowing his role and isn't projected to hit the eastern coast of Florida Sunday evening
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  • #16
  • Aug 29, 2019 5:34am Aug 29, 2019 5:34am
Quoting timingchain
{quote} ET, I rode out Andrew in Miami, about 5 miles north of the very worst of it. The current projected track for Dorian goes over where I live, but, as you wrote, it is highly unlikely to get here. That was a great analysis of oil price behavior. Buy the rumor, sell the fact sounds very plausible.
South Dade here. You already know. Good to meet you timingchain.
We must learn who is gold, and who is gold plated
EventsTrader Live All Time Return: 54.4%
  • #17
  • Aug 29, 2019 10:18am Aug 29, 2019 10:18am
The 1100 ET charts show highly probable impact on Florida, but Dorian could turn north before even crossing the state. So, possibly no significant disruption for oil production.
  • #18
  • Aug 29, 2019 12:23pm Aug 29, 2019 12:23pm
Quoting timingchain
The 1100 ET charts show highly probable impact on Florida, but Dorian could turn north before even crossing the state. So, possibly no significant disruption for oil production.
Yeah, it's looking more and more like Dorian won't make it into the western Gulf.

I'm thinking about energy like this:

  1. Cooler weather over a state of 20m people would require a few less cooling days so lower NG?
  2. Evacuations > higher gas demand > higher RBOB

Self-sufficiency is the greatest of all wealth. - Epicurus
  • #19
  • Aug 29, 2019 1:53pm Aug 29, 2019 1:53pm
Quoting Ef5
{quote} Yeah, it's looking more and more like Dorian won't make it into the western Gulf. I'm thinking about energy like this: Cooler weather over a state of 20m people would require a few less cooling days so lower NG? Evacuations > higher gas demand > higher RBOB
Ef, what do you think about this theory:

If recent rises in crude prices have been related to fears about possible Hurricane Dorian impact, then crude is setting up for a very drastic sell off. It's only a theory because I'm not sure this strength in crude is backed by fundamentals. If it's buying related to uncertainty, this might be a very, very good shorting opportunity. It takes a lot of cojones to sell when a commodity is looking this strong. I wanted to get your take on the theory. Thanks!


This is what I imagine Ef5 looking like in real-life.
Attached Image
We must learn who is gold, and who is gold plated
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  • #20
  • Aug 29, 2019 2:24pm Aug 29, 2019 2:24pm
Quoting EventsTrader
{quote} Ef, what do you think about this theory: If recent rises in crude prices have been related to fears about possible Hurricane Dorian impact, then crude is setting up for a very drastic sell off. It's only a theory because I'm not sure this strength in crude is backed by fundamentals. If it's buying related to uncertainty, this might be a very, very good shorting opportunity. It takes a lot of cojones to sell when a commodity is looking this strong. I wanted to get your take on the theory. Thanks!
I don't think there's a hurricane premium built into crude. The recent rally has had more to do with broad risk-on sentiment from what I've seen; check out this overlay between CL and the S&P in gray:

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Further, implied volatility (subgraph) for USO options hasn't been increasing lately:

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I'd think IV would be rising if a hurricane were being priced in. A more skewed volatility smile would really be the best thing to look at for this to tell whether or not Dorian is being priced in to crude. Here's what the current one looks like (unfortunately I don't have one from a week ago to compare it to):

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Quoting EventsTrader
This is what I imagine Ef5 looking like in real-life. {image}
Self-sufficiency is the greatest of all wealth. - Epicurus
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