Hurricanes effect on UltraShort Oil&Gas ETF

Gustav hits the ground as a category 2 storm and does minimal damage to the oil rigs on Gulf of Mexico. Perhaps, this is the only time where, regardless of the outcome of the hurricane, the UltraShort Oil&Gas ETF will still benefit.

The impact on Gustav being a category 5 hurricane has been discussed in previous post. Here's the analysis on Gustav being a tame hurricane:

• Crude oil drops 10% within 2 days on expectations that oil productions can continue without much delay due to limited damage on tame Gustav.
  
• The continued drop in oil prices do not benefit the refiners and will cost them profit and depress their stock prices.
• Their depressed stock prices of the refiners will have bullish effect on the price of UltraShort Oil&Gas ETF

With 3 hurricanes in the pipeline, they will cause massive shut downs to the refineries. However, as similar story as Gustav, regardless of outcome, it'll be bullish for Ultrashort Oil&Gas ETF.

Related blog link: Gustav and its impact on Ultra & UltraShort Oil&Gas ETFs