Energy prices spiked to records Tuesday amid mounting evidence that Hurricane Katrina's impact will reverberate throughout the U.S. economy. The fallout from the far-reaching natural disaster will affect motorists and companies paying more for energy, shippers who can't move cargo out of Gulf of Mexico ports, and thousands of local businesses.
The wholesale futures price of gasoline Tuesday surged to a record, by far: up 41 cents to $2.475 a gallon at the close of New York trading. The hurricane also delivered a blow to the USA's struggling airlines, driving up jet-fuel prices 22% in two days.
In the Gulf Coast market, the wholesale price for gasoline for immediate delivery was about $2.90, says Tom Kloza, senior analyst at the Oil Price Information Service. He predicts retail gas prices could jump "in increments of 20 to 75 cents a gallon" over the next few weeks.
"We can now describe this as a fuel crisis, and specifically in regard to gasoline," Kloza says. "We are no longer dealing with anything resembling stability in the supply sector."
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Energy prices spiked to records Tuesday amid mounting evidence that Hurricane Katrina's impact will reverberate throughout the U.S. economy. The fallout from the far-reaching natural disaster will affect motorists and companies paying more for energy, shippers who can't move cargo out of Gulf of Mexico ports, and thousands of local businesses.
