In Katrina’s Wake, Oil Surges Past $70

Hurricane Katrina swept ashore yesterday as a Category 4 hurricane, and has left untold destruction to the Gulf states of Louisian, Mississippi and Alabama. Another effect of the storm could be felt for months to come, as crude oil futures briefly touched above $70 per barrel for the first time, and natural gas futures jumped nearly 20 percent.

According to an AP report, the Bush administration is considering releasing some oil from the nation's emergency petroleum stockpile to help refiners once the storm passes, though a final decision apparently has not been made. According to AP, wholesale gasoline prices in the New York and Gulf Coast markets jumped 25-35 cents a gallon on Monday following reports that about eight percent of U.S. refining capacity had been shut down because of the storm.

The Category 4 storm hit an area crucial to the U.S. energy infrastructure: offshore oil and gas production, import terminals, pipeline networks and numerous refining operations in the southern states of Louisiana and Mississippi.

On Wall Street, companies that take workers to and from offshore oil platforms, as well as those that provide other support services to the industry, saw their stock prices rise. Shares of Offshore Logistics Inc. climbed 2.58, or 8 percent, to $35.03 on the New York Stock Exchange, where shares of Oceaneering International rose by $1.45, or 3 percent, to $43.65. The Louisiana Offshore Oil Port, the largest oil import terminal in the United States, evacuated all workers and stopped unloading ships on Saturday. The Gulf of Mexico normally produces 1.5 million barrels of crude oil a day, or about a quarter of the United States' domestic output, according to the U.S. Mineral Management Service.