If you pray, we need to all say a prayer for those in the path of Hurricane Katrina. This is going to be a monster storm from everything I've heard, and New Orleans is about 17 feet or so below sea level. I've also read that New Orleans is the only port than can unload "super oil carriers", and that 5 major oil companies have oil rigs in the area. What could this mean for the economy? Could this cause a shortage of oil? Could we be seeing gas prices at $3.50-$4.00 a gallon until the New Orleans area is rebuilt? If the price of gas goes up that much should President Bush tap into the oil reserves? Should he lift the gas tax temporarily since it is a state of emergency? Both?
(1) Higher oil prices, since the Nawlins area is a major player in the production and distribution of oil. Insurance companies take a huge hit, but hopefully they were smart enough to price their premiums according to risk. Construction industry gets a lot of business, for awhile anyway. (2) If the supertankers can't get into Nawlins, then there may be supply problems, unless you can get the oil transferred from supertankers to regular oil tankers so as to get the oil into smaller, shallower ports. Another supply problem is going to be in regards to shutting down (temporarily) the offshore oil rigs. Also, how many refineries are in the hurricane's path? The other part of your question is: Are there any observable effects on the demand for oil caused by incoming hurricanes? (3) Not sure how high they will go. No doubt oil prices will go up (again). Why do you think they'll come back down afterwards? (4) What makes you think Bush will do this? (5) What makes you think Bush will do this?
Re: Re: Hurricane & Oil Prices? That's absolutely true. My family owns a residential construction company, and thankfully all of the framing, and concrete work is finished as of now, so when the prices of construction materials go up the effect should not be too bad. I'm not that familiar with refineries and offshore oil rigs. Are there any potentional enviromental problems if there is structural damage to either of these? I think the 06' elections come to mind. While there is a supply and demand is a major factor in oil prices I heard a report that the oil companies are making $0.20-$0.30 per gallon of gas. I believe there will be 3 major issues in the 06' election (a) Iraq, (b) the economy, (c) fuel prices, as most Americans want to blame the oil companies and many want to blame Pres. Bush for the current gas prices. On the other side of the coin, what would happen if the democrats started calling for the repeal of the gas tax? That would certainly make for interesting politics in Washington. I was thinking out loud on that one, but I seriously doubt he will do either one.
Re: Re: Hurricane & Oil Prices? Of course, at the local level, gas prices in Nawlins will go sky-high when millions of people go to gas up their cars, all of them trying to get the hell out of town begore the hurricane hits. And, oh God, think of those traffic jams on I-10 and I-55!
Oil and Katrina? Athoritative Answers An editor at The Economist points me to the piece "The Fallout From Katrina," containing insights and details found nowhere else. http://www.economist.com/agenda/displayStory.cfm?story_id=4339099 -Orson
