Economic effects of Katrina will be widespread

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http://www.montereyherald.com/mld/montereyherald/news/nation/12506343.htm

By Kevin G. Hall

Knight Ridder Newspapers



WASHINGTON – Hurricane Katrina has come ashore Monday, but her economic landfall is sure to linger on across the United States and the globe.

The powerful storm disrupted oil production, gasoline refining, grain transportation to name a few sectors. In its aftermath, Katrina is expected to leave behind higher gasoline prices, strain the homebuilding sector and stretch insurers.

Crude oil prices leapt above $70 a barrel on the New York Mercantile Exchange Monday as trading started, driven up by Katrina fears. Prices retreated to close slightly above $67 after it appeared Katrina’s wallop, while devastating, was not the feared knockout. The hurricane hit east of New Orleans, sparing a direct blow to one of the busiest seaports in the world. But long before Katrina touched Gulf shores, it affected interstate commerce. Barges and railroads heading to or from New Orleans and Mississippi ports like Pascagoula and Gulfport ground to a halt.

Among those suffering supply disruptions were inland steel manufacturers, Midwest grain farmers and retailers across the United States. Railroads like the Kansas City Southern and CSX halted activity along the busy Gulf coast, affecting the movement of grains, chemicals and other commodities. Barge traffic along the Gulf portions of the mighty Mississippi River also was disrupted.

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