Hurricane Beryl strengthened overnight into a powerful Category 5 storm as it churned through the Caribbean Sea. The Category 5 storm is the earliest on record in the Atlantic hurricane season and has raised concerns among energy traders about potential disruptions along the Gulf Coast.
On Monday morning, Beryl made landfall on the Caribbean island of Carriacou, Grenada, with winds of about 150 mph. It is the strongest known storm to pass through the Grenadines region, according to NOAA records dating back to 1851.
Beryl’s arrival marks an early start to what some forecasters had predicted would be an active hurricane season. The storm’s intensity has worried energy traders, sending West Texas Intermediate (sometimes called Texas Light Sweet) to two-month highs Monday.
Bloomberg noted: “Oil futures rose Tuesday, trading at their highest since late April, with gains on expectations of a strong Independence Day travel movement and concerns that powerful Hurricane Beryl could cause disruptions to offshore crude production in the Gulf of Mexico.”
Senior analyst Ipek Ozkardeskaya of Swissquote bank, in a note to clients, stressed that while Beryl may not have an immediate impact on operations in the Gulf of Mexico, it could potentially cause disruptions later in the week.
Computer models show the storm will make landfall Friday morning around Mexico’s Yucatan Peninsula before moving north toward the U.S. Gulf Coast.
Related: US Energy Production – Another Record
A combination of Middle East tensions, robust demand ahead of July 4, significant shorting and a brisk start to the Atlantic hurricane season are some of the factors pushing WTI higher, up 10% since April 26.
As we predicted on June 6, an active Atlantic hurricane season with storms like Beryl could disrupt major refineries on the U.S. Gulf Coast. This disruption could push pump prices to the politically sensitive $4 per gallon level for the Biden administration ahead of this fall’s presidential election.
Let’s get ready for more SPR destocking…
Par Zerohedge.com
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