Will Gustav be fanning the flames of oil prices?

 

It’s looking like the menace of Hurricane Gustav means oil prices could go either way next week and no one, even the analysts, seem confident in which way to jump. It’s not unusual to see oil leap whenever there’s a perceived threat to oil supplies, be it weather or terrorism related, for example.

Analysts are divided on what the outcome will be if Gustav does indeed hit hard. Memories of hurricane Katrina, which was right at this time of year in 2005, are still fresh in most people’s minds with the anniversary having just passed. This time round though, speculation is rife that some of the Strategic Petroleum Reserve supplies might be made available. Others are banking that enough of a disruption could lead to oil soaring above the $120 a barrel mark.

Last I saw oil was coming down a little towards the end of the trading week, hitting $115.46 a barrel at Friday’s close on the New York Mercantile Exchange. Of course, that could all change in the blink of an eye when trading begins again after the weekend if Gustav makes its presence felt severely.

Gas retailers aren’t spending time deliberating, that’s for sure. Yesterday they’d hiked prices again by a cent after hearing of the concerns, ending the break in increases we’d been enjoying for almost six weeks in the US.

National average currently stands at $3.688 a gallon, according to Gasbuddy.com.

Weathermen expect by tomorrow, Gustav will be in the Gulf of Mexico. BP, Transocean and Royal Dutch Shell have all been evacuating their staff from the area in their hundreds.

You can be sure there will a lot of nervous people watching Gustav’s progress. Oil companies and their employees, the inhabitants of the surrounding areas, the stock market analysts, investors and environmental groups to name but a few.

Not least of all us poor ordinary folks hearing dire predictions that if Gustav does indeed wreak havoc, we’re looking at $5 a gallon gas. Better fill up your gas tanks while you can still afford to!

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