The impact of hurricane Dean on oil prices have been wishy washy. Many people fear price hikes of oil and food in the foreseeable future but what do the anaylsts have to say about it:
Mexico’s state owned oil company, Pemex, has shut in about 3% of total world oil production as Hurricane Dean impacts production, which should lead oil prices higher.
The 407 wells shut-in by Pemex produce 2.65 million barrels of crude oil and 2.63 billion cubic feet of natural gas per day, while U.S. production from the Gulf of Mexico is roughly 1.3 million (crude) and 7.7 billion (natural gas).
These shutdowns will inevitably have some impact on the price of oil which is really a disappointment considering that the prices of gasoline at the pump have been fairly low. I surely hope that the prices do not go right back up to where they were. If they do, however, it should be reason enough for the government to push for alternative oil solutions and really get the ball rolling. People will become very upset if they see gas prices at the $3.50 range again.
I suppose the only thing we can do is wait and see what the outcome of this event will be. I for one am not happy about this hurricane as I am sure no one else is. Hopefully there will not be any more category 5 hurricanes for the rest of the hurricane season but who knows.
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