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Hurricane Gustav

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Hurricane Gustav Heads for the Gulf and Drives Up Oil Prices
Gustav Will Raise Oil Prices

Traders work in the energy options pit on the floor of the New York Mercantile Exchange on August 28, 2008 in New York City. Tropical storm Gustav may strengthen into a hurricane, threatening US oil production in the Gulf of Mexico.

Photo by Michael Nagle/Getty Images
The Gulf of Mexico is a prime location for creating a strengthening hurricane. Hurricanes that enter the Gulf, especially major hurricanes, often have a direct price-increase effect on oil. There are over 4,000 oil platforms in the Gulf and crude oil prices have already jumped.

Hurricane Gustav was officially back at hurricane strength on the Saffir-Simpson scale as of August 29, 2008. The 5 day outlook for the storm meant New Orleans would get either a direct or indirect hit. Warm ocean temperatures and a low wind shear environment made conditions ripe for a massive storm. There was some indication that wind shear was increasing, which could have slowed the development of Gustav. In addition, meteorologists were watching a high pressure zone over the United States which would alter the path of Gustav.

A location known as the Bermuda High is partly responsible for Gustav's path into the Gulf. A video demonstration of the Bermuda high shows how storms can get bumped into the Gulf. After a hurricane passes, the warm waters will cool as can be seen in satellite images. Ocean water temperatures need to be 80+ degrees and the layer must be relatively thick to sustain a hurricane and make the hurricane grow. As the hurricane gains power, wind shear becomes a great 'hurricane breaker'. Unfortunately, there was little wind shear in the Gulf of Mexico meaning Gustav would later become an intense storm.

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