2009 Atlantic Hurricane Season Forecast

April 2, 2009

Tim Drum

Senior MeteorologistWeatherBug Professional Services

tdrum@weatherbug.com

Hurricane Ike, NOAA

Review of 2008Season Forecast

Forecast Numbers:

• 10-12 named Storms

• 4-6 Tropical Storms should reach Hurricane status

• 2-4 Hurricanes of Major Category III classification

• Net Tropical Cyclone Activity (NTCA) near 100% of normal

2008 Season Forecast

16

8

5

164%

2008 Atlantic Hurricane Season

GeneralOverview

2009 Atlantic Basin Names

Ana Bill ClaudetteDanny Erika FredGrace Henri IdaJoaquin Kate LarryMindy Nicholas OdettePeter Rose SamTeresa Victor Wanda

                                                                                                        

Atlantic Basin T.C. Distribution

                                                                                                        

Atlantic Basin Averages

Current State of theAtlantic Basin

Slightly cooler than

average

SST Anomalies – Atlantic 3/28/09

Still midway through projected WARM ocean phase that is expected to last ~ 10 more years.

Atlantic Multi-decadal Oscillation

Current State of EPACENSO Cycle

El Nino Example - 1997

La Nina Example - 1988

ENSO Cycle

Latest Weekly ENSO SST Anomaly

???

Forecast SST Anomalies - EPAC

Climatology of Comparable Seasons

Going back to 1950, look at a weak La Nina followed by a neutral or weak El Nino.

Establishing Data Set Method

Focus on the seasons from above that also occurred during the “warm” phase of the AMO

Weak La Nina To Neutral Years(ONI)

• 10.5 Storms (10.1)

• 6.2 Hurricanes (5.9)

• 2.5 Major Hurricanes (2.5)

Averages:

Weak La Nina + Warm AMO Years

• 11.2 Storms (10.1)

• 6.6 Hurricanes (5.9)

• 3.6 Major Hurricanes (2.5)

Averages:

Other Factorsto Consider

African Dust

Played a significant role in mitigating tropical cyclone development in 2006 & 2007 and part of 2008.

African Rainfall

Near average rainfall forecast over the northern Sahel region may lead to dust “outbreaks” again, this season.

The Forecast

Summary of Forecast Points

La Nina conditions in EPAC to weaken, especially for the second half of the season.

Statistics from previous near neutral ENSO + AMO years weigh heavily toward reduced activity from last year.

Conditions over western Africa mean additional dust outbreaks over the central and eastern tropical Atlantic.

2009 Atlantic Hurricane Season Forecast

11-13 named storms (10.1 avg.)

6-8 hurricanes (5.9 avg.)

3-4 major hurricanes: winds 111+ mph (2.5 avg.)

Net Tropical Cyclone Activity (NTCA): near 130% of normal.

CME Group Hurricane Contracts• 3 Different types of Hurricane Contracts

• 6 Different locations for Hurricane Contracts

•Event Futures, Options, Event Binary Options– Based upon named Hurricanes making landfall anywhere in the

Eastern US or reaching the CHI-Cat-in-a-box Galveston-Mobile area

•Seasonal Futures, Options, Seasonal Binary Options– Based upon the accumulated CHI value for all Hurricanes that

make landfall within a specific season

•Seasonal Maximum Futures, Options, Seasonal Maximum Binary Options, Seasonal Maximum 2nd Event Binary Options

– Based on the CHI value of the largest Hurricane to make landfall within a specific season

CME Group Hurricane Contract Locations

• Gulf Coast (Brownsville TX to AL/FL Border)

• Florida (AL/FL Border to Fernandina Beach, FL)

• Southern Atlantic (Fernandina Beach, FL to NC/VA Border)

Coast

• Northern Atlantic (NC/VA Border to Eastport, ME)

Coast

• Eastern US (Brownsville, TX to Eastport, ME)

• Gulf & Florida (Brownsville, TX to Fernandina Beach, FL)

• CHI-Cat-in-a-Box (Galveston-Mobile area)

CME Group Hurricane Contract Specifications

Standard Contracts:

• Contract: $1000 times the respective CME Hurricane Index

• Tick Size: 0.1 CHI Index Point

• Tick Value: 0.1 CHI Index point which equals $100

• Hours: Sunday through Thursday from 5.00p.m. to 3.15p.m. Chicago time

• Available: Throughout the hurricane season from January 1 through December 31

Binary Contracts:

• Contract: $10,000 times the respective CME Hurricane Index

• Tick Value: 0.01 CHI Index point which equals $1

• Hours: Sunday through Thursday from 5.00p.m. to 3.15p.m. Chicago time

• Available: Throughout the hurricane season from January 1 through December 31