as they rub their greedy little hands together, smacking their lips, and drooling at the thought of another Katrina.
They sound absolutely gleeful at this seasons forecast.
I never thought of hurricanes as “money makers” but I guess it takes all kinds. Further, you know it is all ’bout making more and more money since the reason Katrina and Rita led to such a spike in gas prices was that there weren’t enough functional facilities to make up for the lost output. Although capacity at many U.S. oil refineries has been expanded, there hasn’t been a new refinery built in the United States in three decades. Think about it. Why not?
Hurricanes could mean $6 gas
A hurricane could send gas prices soaring.
By David Goldman, CNNMoney.com staff writer
NEW YORK (CNNMoney.com) – Batten down the hatches: hurricane season started Sunday.
It’s expected to be a rough one, threatening to upend refineries and disrupt pipelines in the southern United States.
And that could send gas prices, already nearly 20 percent above what they were last year, soaring even higher.
That’s what happened three years ago when the Gulf Coast was battered by two hurricanes – Katrina and Rita – in the span of a few weeks.
“With the market the way it is now, a move in crude because of a hurricane could really be exacerbated,” said MF Global energy analyst Don Luke.
Peter Beutel, oil analyst at Cameron Hanover Beutel, said if a Katrina-like hurricane were to hit in July, gas prices could go as high as $5 or even $6.
“The last thing this market needs at this time is a hurricane, because we can’t afford to lose any of our refining capacity at this point,” said Beutel. “If anything bullish happens with the market in this state, it would make it go absolutely crazy.”
Like any disruption to supply, when a hurricane takes out drilling platforms and refineries, supply and demand principles lead to a jump in crude oil gasoline prices.
But even before the start to hurricane season, speculative traders have started to send oil and gas prices higher in anticipation of a hit to supplies.
“We’re already seeing a hurricane premium on gas of about five to 10 cents per gallon,” said Alaron Trading energy analyst Phil Flynn. “Especially since Katrina, we’ve seen traders build that into prices.”
