Posted by: Salty | August 26, 2008

Gustav Sparks Rise in Oil Prices

Forecasters have suggested that, if Gustav continues to gain strength as it heads toward the Gulf of Mexico, the likelihood that offshore oil rigs will be shut down in the coming days increases.  Such predictions caused the price of a barrel of oil to shoot up $5 by Tuesday afternoon.  As oil prices rise, so will the cost of heating oil, gasoline, and natural gas.  In the U.S.  the price of a gallon of gasoline is expected to rise ten cents before Labor Day weekend.

Most forecasters are suggesting that Gustav will strengthen into a category 3 hurricane within days.  If Gustave makes it into the warm waters of the Gulf, via the Yucatan Channel, the storm may strengthen into a category 5 hurricane–a scenario similar to the events surrounding Hurricane Katrina. 

Wednesday.Projecting even further out, Accuweather.com said Gustav could grow into a Category 5 storm if it passes through the Yucatan Channel and enters the Gulf’s warmer-than-usual waters. Hurricane Katrina struck three years ago this weekend as a Category 5 after shuttering most of the gulf’s oil and natural gas production.

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