Oil workers in the Gulf of Mexico are off the job for their own safety tonight, as Hurricane Katrina moves in — but there is no shelter for what the mayor of New Orleans is calling one of his city’s most important businesses.
“We probably produce about 25 percent to 30 percent of the nation’s domestic oil,” says Mayor Ray Nagin. “If we get shut down with this hurricane that’s going to impact the price of oil significantly.”
Energy analysts agree, they predict the price of a barrel of oil could jump to more than $70 on Monday compared that to Friday’s closing price just above $66.
What could that spike mean for consumers already paying record gasoline prices?
“Hurricane Katrina could add another 20 to 30 cents to the cost of gasoline in this country,” says NBC Global Energy Analyst Daniel Yergin.
Yergin says if Katrina causes considerable damage, the resulting price spikes could affect the cost of heating your home this winter.
Another price shock could add 20 to 30 cents a gallon to the cost of home heating oil this winter as well.
And if you cook on a stove using natural gas, the price of doing so might go up as well, since 20 percent of the country’s natural gas comes from facilities in the Gulf of Mexico.
Does this mean the U.S. might have to tap into the strategic petroleum reserve? As of Sunday night, there’s no word from the White House, which has said before it should only be used in an emergency.