Hurricane Katrina's devastating blow to U.S. Gulf Coast energy operations sent petroleum prices soaring yesterday, with analysts saying crude prices could hit $80 (U.S.) a barrel and pump prices in the United States headed well above $3 a gallon.
Motorists across North America can expect gasoline pump prices will quickly reflect the hurricane's impact, while users of natural gas and home heating oil will also be hit with rising costs.
On the New York Mercantile Exchange yesterday, frenzied traders drove crude oil prices to a record $70.85 during the day. It ended the day at a record close of $69.81. The price of unleaded gas for September delivery soared 20 per cent to $2.47 a gallon, after rising more than 10 per cent on Monday.
Economist Nariman Behravesh said a prolonged spike in energy costs would have a dramatic impact on consumer confidence and spending, and significantly reduce economic growth in the latter part of the year.