Eugene Hoshiko
La Nina, which means 'the girl' in Spanish, is a phenomenon that causes unusual weather conditions. Here's a look at how it happens, and how it's being felt in parts of the economy:
BAD FOR: Offshore oil drillers
U.S. government forecasters say record high Atlantic Ocean temperatures and La Nina will lead to a busy hurricane season in the Gulf of Mexico and along the east coast. La Nina developed in the Pacific in July, reducing wind shear in the Atlantic and making it easier for storms to take shape. Gulf oil rigs, which account for 30 per cent of U.S. crude production, are frequently shut down as storms approach. During the moderate La Nina of 2008, there were five major hurricanes and more than 20 per cent of U.S. oil refinery capacity was idled.
GOOD FOR: Australian wheat farmers
Rains from La Nina are helping end the drought that has driven up grain prices and reduced the country's harvest. Wheat prices have soared this year amid droughts in Australia and Russia, and wet weather in Western Canada. "The weather models are suggesting that La Nina will continue for the next few months, so we will see that rainfall response continue," climatologist Shannon Symons said.
GOOD FOR: Japan
La Nina will boost Japan's economy and stock market, if history is any guide, as consumers will spend more on clothing, food and beverages, according to Sumitomo Mitsui Asset Management. The chart to the left tracks the Nikkei 225 Stock Average and gross domestic product along with La Nina observations by the Japan Meteorological Agency. Among the five previous occurrences since 1988, the equities index started a sustained advance four times, with the exception in 2008, when stock markets around the world collapsed.
Sources: Staff, Bloomberg News, Associated Press, Reuters, American Petroleum Institute, Energy Information Administration.