Storm Gustav may jack up gas prices
Published 10:45 pm Tuesday, August 26, 2008
PORT-AU-PRINCE, Haiti — Tropical storm Gustav dumped torrential rains across southern Haiti on Tuesday, sending global fuel futures soaring on fears the storm could move into the Gulf of Mexico as an “extremely dangerous” storm.
Gustav was downgraded Tuesday night from a Category 1 hurricane to a tropical storm.
Trees toppled as the storm lingered for hours over Haiti’s poor, deforested southern peninsula, and water levels were rising in banana, bean and vegetable fields. One man was killed in a landslide in the mountain town of Benet, a government official said.
Oil prices shot up $5 a barrel Tuesday after the National Hurricane Center predicted Gustav could enter the gulf as a major hurricane this weekend. Prices of futures in natural gas, heating oil and gasoline also rose.
If Gustav continues on its path, it could drive up U.S. gasoline prices by 10 cents a gallon ahead of Labor Day weekend, predicted James Cordier, president of Tampa, Florida-based Liberty Trading Group and OptionSellers.com.
A powerful storm in the gulf could force shutdowns on the offshore rigs that account for a quarter of U.S. crude production and much of its natural gas. Royal Dutch Shell PLC said it could begin evacuating workers as soon as today.
“Most indications are that Gustav will be an extremely dangerous hurricane in the northwestern Caribbean Sea in a few days,” the Miami-based hurricane center said.
In Haiti, hundreds of people in coastal Les Cayes ignored government warnings to seek shelter, instead throwing rocks to protest the high cost of living in the Western Hemisphere’s poorest country. Witnesses said U.N. peacekeepers used tear gas to disperse the crowd.
Haiti is a tinderbox because of soaring food prices, which in April led to deadly protests and the ouster of the nation’s prime minister. It was difficult to ascertain the extent of the damage to the nation’s crops on Tuesday because of Haiti’s poor infrastructure and faulty communications.
Forecasters said Gustav should slice along the southern coast of Cuba all week and grow into a Category 2 hurricane with 96 mph winds before entering the central gulf Sunday.
The U.S. military base at Guantanamo Bay, Cuba, had been expecting a direct hit, but later forecasts suggested the fiercest winds and rain will pass offshore.
