Hurricanes and Oil Pricing

The price of oil has lept once again after Katrina's wrath in the gulf has moved past.

The shutdown of oil platforms, refineries and pipelines along the Gulf Coast drove energy prices sharply higher Tuesday, all-but-guaranteeing a surge in pump prices in the days ahead. Oil prices jumped by more than $3 a barrel to climb above $70 a barrel.

The buying frenzy reflected uncertainty and fear about the full extent of the damage Hurricane Katrina inflicted on key energy infrastructure.

"This is an extremely serious situation," said Tom Kloza, director of the Wall, N.J.-based Oil Price Information Service.

Analysts said that even if Katrina did less harm than feared its effects would nevertheless tighten the availability of already scarce refined products, such as heating oil and gasoline.

America's introduction to Peak Oil. We must understand that literally overnight Katrina blasted oil prices to over $3.00/gallon. She affected over 25% of domestic oil production herself; at the time the peak occurs, an event such as this could exponentially increase oil costs.

Check out this AP image of a Gulf oil derrick that became unanchored and impacted a bridge in Mobile, Alabama: [A town that shares a name with an oil company...]