There has never been a storm quite like this. If Hurricane Florence makes landfall in North Carolina or Virginia, as a Category 4 storm, it will be the first storm of such a strong magnitude to hit so far north. If it impacts, damage will be major, and we pray that there are no fatalities.
The markets are already being moved by Hurricane Florence as the Carolinas and Mid-Atlantics prepare for this massive hurricane. Not only is it being felt in energy where the oil market prices rallied initially in the path of the storm, only to sell off later as it fears of potential demand destruction. While millions are in the path of the storm, they are being advised to fill up their gas tanks and to get away. Others are worried that surge in demand may be the last uptick for a while.
Most of the refineries in North Carolina are more inland but there are worries that flooding and power outages could shut down the Colonial Pipeline, the main line to move gasoline and diesel from the Houston, Port Arthur and Lake Charles refineries northeast, running through states in the Southeast to its end-point in Linden, New Jersey.
Duke Energy is warning that widespread power outages are likely in North Carolina and South Carolina – lasting multiple days to weeks. Natural gas demand will drop as the power burn will fall off.
Other commodities are at risk as well, from cotton to soybeans to hogs and cattle. Not only does the hog market have to deal with the rapidly expanding African Swine Fever, that has caused thousands of hogs to be culled in China, it now has to brace for the impact on one of the largest hog producing states in North Carolina.
Lumber is also on the rise as the area is not only a production area but also because it is likely that much will be needed to rebuild what is expected to be major damage.
And if Florence was not enough, the Atlantic is just a hotbed of storm activity that will keep markets in a state of high volatility as hedgers and speculators scramble to stay ahead of the storms. Reuters reports that Isaac, formerly a Category 1 hurricane, has weakened to a tropical storm but was expected to be at or near hurricane strength when it approaches the Leeward Islands this week, the U.S. National Hurricane Center said. Then you have Hurricane Helene that is looking like it has a boomerang tract, and then you have two other tropical waves that could become tropical storms in a few days.
Leave A Comment