La Nina Weather Phenomenon Could Impact Biden's Election Prospects
La Nina and the Atlantic Hurricane Season
The Biden administration is bracing for the impact of the La Nina weather phenomenon, which is predicted to result in an active Atlantic hurricane season. The potential disruption to major US Gulf Coast refineries by these storms could cause average gasoline prices to rise to the politically sensitive level of $4 per gallon, just in time for the November presidential elections.
The Department of Energy's decision last month to release a million barrels of gasoline from reserves in the Northeast ahead of the Fourth of July holiday and the summer driving season is a clear indication of the Democrats' concern about rising inflation as their election prospects waver.
The National Oceanic and Atmospheric Administration (NOAA) explains that La Nina conditions lead to a decrease in wind shear in the Atlantic Basin, which encourages more tropical development in the Caribbean Sea.
NOAA's Hurricane Season Forecast
NOAA's recent update states, "The upcoming Atlantic hurricane season is expected to have above-normal activity due to a confluence of factors, including near-record warm ocean temperatures in the Atlantic Ocean, development of La Nina conditions in the Pacific, reduced Atlantic trade winds and less wind shear, all of which tend to favor tropical storm formation."
NOAA's hurricane season forecast includes the following predictions:
- An 85% chance of an above-normal 2024 Atlantic hurricane season
- A 10% chance of a near-normal season
- A 5% chance of a below-normal season
- 17 to 25 total named storms (winds of 39 mph or higher)
- 8 to 13 of these storms are expected to become hurricanes (winds of 74 mph or higher)
- 4 to 7 of the hurricanes may become major hurricanes (category 3, 4, or 5; winds of 111 mph or higher)
- Forecasters have 70% confidence in this range
Impact on Gasoline Prices
Given the likelihood of an active hurricane season due to La Nina, Goldman analysts are now considering the potential impact of these storms on refineries and the possible implications for gasoline prices.
Callum Bruce from Goldman predicts that gasoline pump prices will average around $3.3 per gallon through October. However, he suggests that pump prices in October could rise to nearly $4 if the hurricane season is particularly active. If the season is calm, prices could drop to $3.2.
Implications for the Presidential Election
The report also notes that the fall's hurricane season, which is concentrated around August-October, but also spills over into July and November, could be unusually significant for the upcoming US Presidential election.
NOAA predicts an above-normal Atlantic hurricane season, issuing a record high forecast for storms, hurricanes, and major hurricanes in its May outlook. The midpoint of its stated forecast ranges for each category is 100-200% of their historical averages.
The report concludes by suggesting that if the active hurricane season results in the shutdown of a refinery or two, the administration will do everything in its power to prevent pump prices from hitting $4 before the elections.
Who Will Emerge Victorious?
Will it be Mother Nature or Biden? Only time will tell.
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