Expert: If Major Hurricane Hits Gulf, Oil Spikes 50% Or More; Many Will Park Their Cars, Bringing Price Back Down

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Should a Category 3 or higher hurricane hit the Gulf of Mexico this summer, causing the sort of widespread damage to America’s energy infrastructure inflicted in 2005 by Hurricane Katrina, spot energy prices will spike 50% to 100%. But don’t expect $200-plus oil to last for long. Such a spike will break the backs of many Americans, causing them to stop driving for a while, which will bring prices back down.

That’s the forecast of veteran energy analyst Glenn Wattley, managing director of West Bay Energy, an energy strategy and private placement firm in Massachusetts. Wattley told that it’s impossible to model the impact of a massive hurricane this summer because, “There is no experience except Katrina. But that happened when prices were not so high.”

“That being said,” Wattley continued, “the disruption would cause a severe shortage and prices would easily go up 50%, and, who knows, they might double. The speculators would have a field day.”

But not for too long, Wattley indicated. Such a price spike “would break our backs and a significant set of the public would simply stop driving for a while. So the peak would be corrected,” though clearly not before inflicting broad damage on an already fragile economy.

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