So far this year, 4 storms have entered the Gulf of Mexico–Arthur, Dolly, Edouard, and Fay. Not one of them has impact the oil infrastructure. Will Gustav follow them to the big, blue ocean in the sky? NO…

Update: What a difference 9 hours makes. Left for dead last night, Gustav put on an extremely quick burst of strenthening and is up to 70mph, and headed towards hurricane strength. I figured the storm would eventually restrengthen, but not nearly double its windspeed in 9 hours. Major props to the computer models for seeing this coming. Its track has been shifted back south, and now Texas looks to be under the gun. A Cat 3 is very reasonable and a 4 is not out of the question. However, the storm may have to travel over Jamaica which will greatly hinder its intensification. Should the storm continue moving WSW, the Yucatan might also come into play down the road.

Not only that, but we now have Tropical Depression 8, soon to be Hanna, which is on track for Florida, as at least a cat 1. The tropics are alive. Oil and NG up this morning. I might look to buy on a dip.

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Understanding Gustav involves completely ignoring the present and believing in the future. Common sense says the storm is doomed, fancy computer models say the coastline is doomed. Right now, common sense is winning.

The Present: There is very little left of Gustav. Last night, the storm unexpectedly screeched to a halt just after moving offshore of Haiti. Its proximity to the coast has caused the storm to weaken quite significantly today, down to a rather generous 45 mph. The center of Gustav is essentially exposed and very little intense convection remains. In fact, looking at the Atlantic, a blob to Gustav’s northeast that is destined to become Hanna looks far more impressive. The storm has also nudged a bit to the south. If this trend continues, Gustav will have to deal with the rugged terrain of Jamaica as well. I would not be surprised if Gustav is downgraded to a tropical depression at some point.

Image: Satellite showing a very weak Gustav west of Haiti and a strengthening system east of the Leeward Islands that will likely become Hanna.

For most of today, Gustav has been pulling away from Haiti at a painfully slow 4 mph. The storm’s slow motion is due to weak steering currents with it being squeezed between a high pressure area to its west and an upper level low to its east. However, as both begin to slide to the east, Gustav will be accelerated around the clockwise flow surrounding the high. At 8pm, it appears that this has finally begun to occur, as the forward speed has increased to 7 mph.

Image: Upper Level Wind map showing an anti-cyclonic feature (High) and a cyclonic feature (Low) on either side of Gustav. The vectors cancel out leaving Gustav with weak steering winds. As the high and low slide east, the high will become the dominant feature and Gustav will move to the west.

Once the storm begins moving, it will have the chance to restrengthen. The NHC is still calling for Gustav to intensify into a Cat 3 storm with 115mph winds while south of Cuba, which is very agressive in my mind. To be sure, conditions are very favorable. Gustav will be above the warmest waters in the Atlantic, under less than 15 knots of shear, and will have an upper level anticyclone positioned over it allowing the storm to vent.

However, Gustav, a small storm since inception, has had its core severely disrupted by its extended stay over Haiti. Looking at recent satellite pics one can see that the storm’s most intense convection is located well away from the center in feeder bands, evidence of a broken core. Building a new core takes time and I believe it will take longer than currently forecast to ramp up, if it does so. The computer models still intensify the storm significantly. The most recent runs of the GFDL intensifies Gustav to 130 mph (strong Cat 3) while the HWRF intensifies it to 155 mph (strong Cat 4). Both of these seem insensible right now. I imagine that the NHC will have to reduce their intensity forecast by at least 20 mph soon. I am not saying that Gustav will not reach Cat 3, or even Cat 4, only that based on its current appearance, it would be imprudent to call for such strengthening.

Not much has changed regarding Gustav’s track. In fact, it looks pretty much the same as this time last night. The models have flipped back and forth between a more westerly track towards Texas and a more easterly track towards Ms/Al/FL, with the latest shift more towards the west.

With the storm still nearly a week from landfall, pinpointing a single location is futile. Anybody inside the infamous “cone” of uncertainty should be making preparations. This cone includes the coastline between Houston, Tx and Appalachicola, Fl. Some of the models are indicating that Gustav might stall somewhere in the Gulf, but this is a very recent development and we will need to wait for more runs to support.

I closed my positions in UNG@40.35 and APA@119.15 this morning, for tidy profits of about 10% on each. I am still holding OMNI, RIG, NOV, and a large quantity of CHK. If Gustav does not strengthen marketably overnight, I would not be surprised to see energy take a tumble tomorrow morning. In my mind, this might be a good buying opportunity, but I will have to wait until morning to see how well Gustav is re-organizing.

Note: I am well equiped to handle ridicule on unfortunate forecasting. Bring it.

Disclaimer: I believe that there are even odds of at 8pm tomorrow of the world bemoaning one of the NHC’s most blown forecasts on record and panic setting in as Gustav strengthens from a 45 mph TS to a 100 mph Cat 2 in under 24 hours.