Our prayers are going out to Florida as a massive storm that could be the worst storm in 100 years approaches and one my friend Robert Ray at Fox Weather says is the scariest storm of his illustrious hurricane tracking career that goes back to Katrina. Robert points out that already Florida gas stations are running out of fuel and is warning that folks need to get out because he fears that after the potential devastation of this storm, it will be hard to find the necessities to sustain life.
Fox Weather is reporting that Hurricane Milton has the potential to become one of the most destructive hurricanes on record for west-central Florida, which includes the Tampa area, as millions of residents continue to prepare for life-threatening impacts and evacuate the coast and other low-lying areas ahead of the monster storm’s arrival on Wednesday.
Residents of Florida are preparing for the third hurricane strike of the season, following Debby’s landfall in August and Helene’s in September. Cities such as Tampa, Fort Myers, Orlando and Jacksonville are all in the forecast cone for Hurricane Milton.
While there are no reports of Hurricane Milton impacting offshore oil facilities, the mere size of this storm could lead to a slowdown in imports and exports. We will keep an eye on the news to see if any offshore oil facilities are impacted.
After yesterday’s surge, oil prices are pulling back a bit, partially because the Chinese government did not add any new stimulus to the system. The Chinese stock market started off extremely strong rallying over 11% but fell back to close only 5.9% higher. The sharp selloff late in the day shows that the market wants more stimulus by China. Reports were saying that the Chinese economic team are meeting so the possibility exists we could see some more stimulus, but the market wants more.
The oil market is still awaiting Israel’s response to 2 Iranian missile attacks on their territory. Some reports say that Israel’s response could come in hours. Members are suggesting that Israel may play the waiting game as they are being pressured by the Biden administration to look for alternative ways to punish Iran. In the meantime, overnight Israel offered more offense into Lebanon and is taking out more of Hezbollah’s people and capabilities. Reuters reported that Israeli forces had begun ground operations in the southwest of Lebanon.
Tonight, we get data from the American Petroleum Institute (API). Last week the report showed a crude drawdown while the Energy Information Administration (EIA) showed a big crude build. More than likely the API will have to play catch up with the EIA so we may get a build in tonight’s report, but we expect that tomorrow’s report from the EIA will show a drawdown. This year’s harvest is ahead of schedule so we may start to see drawdowns and distillate inventories.
Karen Braun Global Agriculture Columnist at Reuters says that the US soybeans were 47% harvested as of Sunday, the date’s fastest pace since 2015 and above the year-ago 37%. Illinois, Iowa, Minnesota, North Dakota & Ohio are among the states where the harvest pace is 10+ percentage points ahead of the five-year average.
Corn was 30% harvested as of Sunday, which is an average pace compared with recent years. Kansas, Missouri, Ohio & Texas are the states notably ahead of normal, but most others are near their five-year averages. Dry weather this week will lend to harvest efforts. Dry weather of course will lead to less need for propane to dry the crop as well.
Natural gas prices are basically holding up. There are real concerns about demand destruction in the aftermath of Hurricane Milton.