August 29, 2005
The strength of Hurricane Katrina is unprecedented, and could cause problems not only for the people in its path, but also for anyone who drives a car.
Oil analysts say, this is absolute bad news for consumers, shutting down offshore production of at least a million barrels of oil daily.
One huge headache facing officials is protecting the oil rigs. The Gulf of Mexico is a major hub of energy production in this country with almost a third of the oil used in this country coming from there. The amount of natural gas there is 25 percent. In these times of volatile prices and short supplies, a hurricane's wrath could prove even more painful at the pump.
"The fact that this happens at a time when the markets are as tight as they are, when the markets are as nervous and jittery as they are. I mean the timing just could not be worse," said Peter Beutel, President of Cameron-Hanover.
Beutel and others predict Hurricane Katrina will bring an immediate five cent a gallon increase in gasoline prices. The increase could bring even more bad news.
Almost all of the offshore oil platforms in the gulf had been evacuated, proving even more that the storm is not only a problem in Louisiana.
Fear alone of Hurricane Katrina pushed oil prices over the weekend past $68 a barrel.
Absolute bad news surrounds the storm for consumers, with at least one million barrels of oil production shut down a day. The impact of Katrina will ultimately affect the gas pump. Predictors say an immediate five cent price increase is likely. Though the New Orleans area is thick with refineries built to withstand hurricanes, they've never been hit by one as hard as Katrina.
"We have one hundred thirty-five petrochemical companies refining forty percent of the nation's oil. This country will know that the storm hit New Orleans," said Terry Ebbert, Director of New Orleans' Homeland Security Department.
There's even more bad news. New Orleans is the biggest U.S. Port for importing foreign oil. It is also shut down.