Effects Still Unknown, But Katrina Forces Oil Reserves Open
(Akron/Tire Review) While rescue efforts continue in the aftermath of Hurricane Katrina, which slammed into the U.S.’s Gulf Coast near New Orleans and Biloxi, Missouri, Monday, government officials and business analysts are trying to piece together the impact that devastating storm will have on American industry and the global market – particularly oil prices.
Reports out of the Gulf Coast region indicate that many oilrigs were damaged, but not nearly as badly as expected. Oil refineries and petroleum processing facilities in that area sustained unknown levels of damage, and heavy flooding in that region may make it impossible to fully inspect those facilities for weeks. Further, the docks near New Orleans, one of the US’s major ports for oil shipments, will likely be closed for some time.
As of early Wednesday morning, reports from Washington, DC, said that President Bush would crack open the US Strategic Oil Reserves to help lessen the expected impact on oil importation and processing. Meanwhile, there has been a renewed call for America to increase its oil refining capacity, which has been severely shaken as a result of the storm.
Crude oil prices, which hit a record $70 per barrel earlier this week in anticipation of Hurricae Katrina, remained above that mark. Reports from some parts of the country early Wednesday showed gasoline retail prices soaring past $3 per gallon, with stations in metro Detroit selling gas as high as $3.29 per gallon for premium.
Diesel fuel prices, meanwhile, remained fairly calm, hovering around $2.59-$2.79 per gallon across the US Fuel industry analysts said that a full assessment of the damage caused by the storm will determine the long-term status of gasoline and diesel pricing.