Record-warm ocean surface temperatures fueled above-average activity during the 2023 Atlantic hurricane season. Still, the storms steered clear of the U.S. energy complex and made no lasting impact on natural gas production or prices.
The National Oceanic and Atmospheric Administration (NOAA) said in a report this week that 20 official storms emerged in the Atlantic basin in 2023 – 19 named storms and one unnamed subtropical system that formed in January – ranking the season as the fourth most active on record.
Seven storms were hurricanes and three intensified into major hurricanes, NOAA said. An average season has 14 named storms, seven hurricanes and three major hurricanes. The agency’s records date back to 1950. While powerful storms can of course form at any point, the hurricane season officially begins on June 1 and culminates on Nov. 30. NOAA data showed no significant storm formations this week.
El Niño conditions that emerged earlier this year – and that are forecast to extend through this winter – did not disrupt storm formations this season. NOAA said El Niño weather patterns historically have suppressed Atlantic hurricane activity, but heat from exceptionally warm sea surface temperatures this year created the energy needed for tropical storms to mount momentum.
“The Atlantic basin produced the most named storms of any El Niño influenced year in the modern record,” said NOAA’s Matthew Rosencrans, lead hurricane forecaster at the Climate Prediction Center. “The record-warm ocean temperatures in the Atlantic provided a strong counterbalance to the traditional El Niño impacts.”
Still, while multiple storms delivered chilly rains and powerful winds to the eastern United States this season, the Gulf Coast states were spared from severe destruction and, as such, there was no substantial impact on oil and gas production. In past years when hurricanes churned in abundance, Gulf of Mexico (GOM) production was interrupted and supplies at least temporarily threatened. Prices increased in response.
GOM producers supply about 5% of total U.S. dry gas production, according to the Energy Information Administration.
“The 2023 Atlantic hurricane season has been well above the historical average in terms of the number of storms, although compared to recent hyperactive seasons, it has largely flown under the radar, as the majority of the tropical storms and hurricanes have remained over the open waters of the ocean,” said AccuWeather meteorologist Brian Lada.
In fact, with an expected spike in liquefied natural gas demand next year, when new export facilities are slated to open, producers have steadily increased output this year.
After topping 103 Bcf/d over the summer months – a record level – U.S. production reached new all-time highs at 106 Bcf/d this fall. At the same time, weather-driven demand proved modest through autumn. What’s more, El Niño conditions tend to result in above-average northern temperatures – and lighter heating demand – during the winter months. National Weather Service forecasts point to a relatively benign December from a natural gas demand perspective.
Price Pressure
As such, Henry Hub futures that hovered below $4.00/MMBtu over the summer – far from the nearly $10 peak of 2022 – are under even more pressure in November. Prompt month futures have recently traded below $3.
Natural gas cash markets have been similarly impacted. For example, while NGI’s November Bidweek National Avg. rose 85.5 cents month/month to $3.135/MMBtu ahead of winter heating season, it remained well below the year-earlier average of $4.950. NGI’s Weekly Spot Gas National Avg. for the Nov. 20-22 period was just $2.850.
To be sure, local markets did feel the impacts of hurricane activity.
Hurricane Idalia was the only full-fledged hurricane to make U.S. landfall in 2023, NOAA noted. It arrived as a Category 3 storm on Aug. 30 near Keaton Beach, FL, and caused storm surges up to 12 feet and bouts of flooding in the Southeast.
Additionally, Tropical Storm Ophelia made landfall as a strong tropical storm with 70 mph winds on Sept. 23. It delivered gusty winds and significant river and flooding in portions of eastern North Carolina.
In Canada, Hurricane Lee made landfall as a post-tropical cyclone in Nova Scotia on Sept. 16. Strong winds with hurricane‑force gusts from Lee caused extensive power outages in parts of Canada and neighboring Maine.
AccuWeather’s Lada said “a burst of early-season activity followed by a frenzy of storms from mid-August through October used up all but two of the 21 names” designated for the 2023 hurricane season. Vince and Whitney were the only names unused.
“There have only been three seasons in history when the list of predetermined names was exhausted,” Lada said. “The first of which was the historic 2005 season, which generated 28 named storms, followed by the 2020 season, which had 30 named storms, and the 2021 season, which featured 21 named storms.” NOAA said the central Pacific basin had a near-normal season with four tropical systems traversing the basin. The eastern Pacific basin hurricane season was above normal with 17 named storms, of which 10 were hurricanes and eight of those major hurricanes, the agency said.
