Energy prices soared yesterday over new fears of a two-punch hurricane crisis that could wreck Christmas shopping and plunge the economy into a recession next spring.
Oil prices surged with the biggest one-day jump ever – $4.39 a barrel – while natural gas hit its highest price ever recorded.
A new storm, dubbed “Rita the Wrecker” by analysts, bore down on the already crippled Gulf Coast refineries and oil rigs.
“If Rita turns into another [Hurricane] Katrina, we’re all in deep trouble,” said energy analyst Peter Beutel of Cameron Hanover.
Renewed threats of Gulf hurricane destruction – which could hit by Friday – came amid wide disappointment that the world’s oil cartel, the Organization of Petroleum Exporting Countries, will probably sit on its hands and not rush out any additional crude oil.
OPEC said the energy problem wasn’t raw crude supplies but a bottleneck at refineries that haven’t been operating at capacity due to storm damage and other causes.
About 55 percent of oil production and 35 percent of gasoline output in the region remain shut down from Katrina, the government said.
Retail stores could be the first sector to suffer the impact of shoppers spending extra billions on gas pumps and energy.
“As the Northeast starts paying heating bills, people will face a tight Christmas – they’ll be really stretching their limits,” said Beutel.
“Some think this could lead to a recession by spring.”
Consumers in the first eight months this year have shelled out $75 billion more in after-tax dollars for gasoline than they spent last year at this time, said Beutel.
“When you add heating oil and natural gas for the whole year, double the figure,” he said.
Economist Kathleen Camilli says the oil shock is causing “more than the usual amount of concern.”
Crude soared to $67.39 a barrel in New York trading, nearing crude’s high of $70.85 on Aug. 30 during Katrina’s fury.
Heating oil jumped 11 percent to $2.0384 a gallon, up 20 cents, while natural gas surged 13.6 percent to a record of $12.663 per million British thermal units, up $1.519. Natural gas is 500 percent more costly than in January 2002.
Gasoline rose 14.6 percent to $2.0427, up 26 cents a gallon, and is 61 percent higher than a year ago.
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Eye of the storm
Surging oil and gasoline prices mark the approach of Tropical Storm Rita to the Florida Keys and worries
OPEC won’t come through with additional supplies.
Crude oil (Price per barrel): Close: $67.39 (4.39)