Two stories on CNN.com are cause for serious concern about the short and long term impact of Katrina
First, there’s this story about the possibility of $4 a gallon gas
Consumers can expect retail gas prices to rise to $4 a gallon soon, but whether they stay there depends on the long-term damage to oil facilities from Hurricane Katrina, oil and gas analysts said Wednesday.
“There’s no question gas will hit $4 a gallon,” Ben Brockwell, director of pricing at the Oil Price Information Service, said. “The question is how high will it go and how long will it last?”
Then, there’s this story which asks if another gas crisis is looming.
The impact of Hurricane Katrina on U.S. oil production may be worse than initial reports estimated and could lead to a national gas crisis in the short run, analysts warned Tuesday.
Pre-Katrina, CNN featured this analysis which argued that the U.S. economy was largely immune to the effects of an oil price hike.
NEW YORK (CNN/Money) - A new week, a new record: the stubborn surge in oil prices hasn’t shaken the U.S. economy — yet.
But economists and other experts expect that the months to come will challenge the ability of American consumers and businesses to keep absorbing the sticker shock of rising energy costs.
Combined with the effects of the $ 25 billion or more in losses caused by Katrina, the economic impact of $ 4 per gallon gasoline cannot be discounted. It would cost $ 60.00 to fill a 15 gallon tank. The impact would reverberate throughout the economy as shippers raised their prices, retailers raised theirs, and so forth. Companies already on the edge of bankruptcy — such as a large part of the airline industry — would be pushed further to the edge.
I have no idea what is actually going to happen in the coming weeks and months, but I have no doubt that we will remember Katrina for a long time to come.
Update @ 5:30pm: Will Collier at Vodkapundit reports on possible gas shortages in the Atlanta area.
Update @ 5:40pm: More analysis here:
If gas hits $4 a gallon, then all bets are off for the U.S. consumer who has shown remarkable resilience to higher gasoline prices.
The precipitous gas price hikes will hit U.S. consumers both psychologically and in their wallets, economists say.
Technorati Tag: Hurricane Katrina gas prices
