The hurricane has closed ports in Virginia, the largest coal exporting district in the US and this will likely have an impact on dry bulk markets. As with most hurricanes it is proving unpredictable and it will likely cause considerable disruptions to the freight infrastructure in this area. Hurricanes Isaac, Helene and Olivia are also forecast to hit the region in the coming weeks which will cause further disruption to US coal supply, for both metallurgical and thermal coal. The Hampton roads area has already been experiencing some congestion due to rail issues and also an increase in coal exports- recent data issued by the Virginia Maritime Association indicates that August coal exports were at a four-year high.
North and South Carolina are also known for their cotton industry, which has experienced a short-term boost in terms of prices. However, with cotton crops currently right in the middle of the harvesting season, there are concerns that the hurricane could cause heavy flooding, which could potentially prove catastrophic for the remaining crops and result in a supply shortage.
Oil prices have also spiked to the highest levels seen since 2014, breaking the $80/barrel level amid fears of oil shortage based on the threat of oil sanctions on Iranian crude and now Hurricane Florence. Secondary hurricanes could pose an even bigger threat to supplies should Hurricane Isaac hit the gulf of Mexico and cause disruption to refineries and production in the area., which could impact tanker markets.
Data published earlier this week by the EIA (U.S. Energy Information Administration ) indicates that the US is now likely to be the largest global crude producer of crude. Preliminary estimates from the EIA’s short-term energy outlook show that in February, US crude production exceeded that of Saudi Arabia for the first time in over two decades and in June & August, the US also surpassed Russian crude production, for the first time since February 1999.
