Hurricane Stronger Than Katrina Hits US... Oil Price Concerns Amid Damage to Petroleum Facilities

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Possibility of Gasoline Price Increase Raised

[Asia Economy New York=Correspondent Baek Jong-min] The super typhoon Ida made landfall in Louisiana, USA, making large-scale damage inevitable. As significant damage is expected in the heart of the US oil industry, concerns are growing that gasoline prices may surge again.

[Image source=AP Yonhap News]

According to the Associated Press, Hurricane Ida made landfall in Louisiana on the 29th (local time) with a maximum wind speed of 230 km/h. Ida intensified to a Category 4 hurricane just before making landfall in Louisiana. US meteorological authorities urged residents to evacuate, stating that Ida's power is equivalent to the highest Category 5.

CNN also reported that Ida is the strongest hurricane to make landfall in Louisiana. Hurricane Katrina, which struck Louisiana and Mississippi on August 29, 2005, causing the deaths of over 1,800 people, was only a Category 3 hurricane.

President Joe Biden approved the declaration of a state of emergency for Louisiana and Mississippi, where damage is expected due to Ida's landfall, and visited the Federal Emergency Management Agency office, promising, "The damage from the hurricane will be enormous. The federal government will actively support rescue and recovery efforts."

Strong winds have already caused trees to fall, resulting in power outages for 500,000 households. As Ida moves inland, power outage damage is expected to worsen.

Significant damage is also expected to the US southern petrochemical industry due to Hurricane Ida. Ida struck Port Fourchon, which accounts for 18% of the total US oil supply. Fox Business forecasted that more than 10 refineries producing over 2 million barrels of gasoline per day will face operational disruptions due to Ida. CNN reported that more than 95% of oil production facilities in the Gulf of Mexico have been shut down.

Due to concerns about supply shortages, gasoline prices are strong. Gasoline futures rose from $2.27 per gallon on the 26th to $2.33 per gallon on this day. If the reopening of oil facilities is delayed, gasoline prices could rise even further.

According to CNN, after Hurricane Katrina made landfall in 2015, US gasoline prices surged by 18% per gallon within a week. It took two months for gasoline prices to return to normal at that time. As of this day, the average US gasoline price compiled by the American Automobile Association is $3.148. Fox Business expressed concern that Ida could be a nightmare for gasoline prices.

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