Expect Oil Price Spike After Hurricane Ida
As Hurricane Ida quickly intensifies and makes a beeline towards the Louisiana coast it is no secret what comes next.
Oil and natural gas futures ended the week with strong gains as Ida gained strength in the Gulf of Mexico. Its real impact will be felt Monday when the damage to refineries along the coastline is more known. The hurricane is expected to reach Category 4 status before it likely hits near New Orleans on the 16th anniversary of Hurricane Katrina. Oil workers representing 89 platforms are already in the process of being evacuated.
Gulf of Mexico oil wells account for 17 percent of United States crude oil production and more than 45 percent of the total refining capacity. The shutdown of the Keystone pipeline also comes into play. A government watchdog group reported this week to have found multiple problems with the construction, manufacture and design - leading to President Joe Biden's decision to revoke an extension for the pipeline.