NOAA Issues 2009 Hurricane Outlook: Near Average in Atlantic, Near to Below in Eastern Pacific

PM Update: Natural gas prices finished the day down over 9%.

Original post:
NOAA this morning issued the initial 2009 hurricane season outlook. The forecast calls for near average storm activity in the Atlantic and near to below average in the eastern Pacific. For the Atlantic, the probability is 50% for near average and 25% each for above or below average. In terms of number of storms, this represents a 70% chance for 9 to 14 named storms, 4 to 7 of which could become hurricanes, including 1 to 3 major storms. According to NOAA's Climate Prediction Center, the seasonal outlook is influenced by several conflicting climate effects:

Supporting more activity this season are conditions associated with the ongoing high-activity era that began in 1995, which include enhanced rainfall over West Africa, warmer Atlantic waters and reduced wind shear. But activity could be reduced if El Nino develops in the equatorial Eastern Pacific this summer or if ocean temperatures in the eastern tropical Atlantic remain cooler than normal.

In the eastern Pacific, the outlook expects an 80% chance of a near to below normal season. There is a 70% chance of storm activity in the range of: 13- 18 named storms, 6- 10 hurricanes, 2- 5 major hurricanes.

Image (click to enlarge): 2009 hurricane season outlook from NOAA

With oil up 35% year to date to a 6-month high, CNBC earlier today explored the influence of the storm season and other factors on the price of oil going forward (video below). In the short term, the better than expected hurricane forecast, higher than normal inventories, a falling dollar in the face of over $100 billion in Treasury debt to be issued next week, and a dropping stock market are being credited for a decline in natural gas prices of as much as 8% today.