Hurricanes disrupt oil production in the Gulf of Mexico because producers shut in oil platforms to safeguard lives and to prevent damage. We examine the effects of these temporary oil supply shocks for real economic activity in the U.S. We find no evidence that temporary oil supply shocks affect state-level employment or indirectly affect industrial production in sectors not immediately related to oil production. Temporary oil supply shocks appear to have minor price effects, mainly for gasoline prices and CPI inflation. We also find no effect on imports, exchange rates or the import price of oil. Our results suggest that oil reserves held by U.S. refiners are largely sufficient to absorb any temporary production disruptions.

The authors’ analysis of commodities sets the stage by first concisely identifying the three most significant macro-factors for the year. With the foundation set, we examine a selection of energy, metals, and agricultural products where we highlight both the similarities and key differences in terms of how each commodity responded to our three major macro-factors. The article closes with some observations concerning the drivers of commodity super-cycles and the difficulties of risk management when uncertainty is elevated and risk is hard to quantify.

This article provides a brief update from Dr. Thomas Brady, including the recent news that CU Denver’s J.P. Morgan Center for Commodities is merging with CU Denver’s Global Energy Management (GEM) Program. In addition, he discusses the academic initiatives of the combined entity. On the applied research front, the merger will allow GEM industry partners and stakeholders to participate in the Center’s annual applied commodity research symposium as well as contribute articles to the new version of the GCARD.