The price of crude oil dropped below $100 per barrel for the first time in six months Sept. 15, closing at $95.71 on the New York Mercantile Exchange. With Lehman Bros. heading into bankruptcy and Merrill Lynch agreeing to a buyout, the market reacted to fears that a global economic decline would cut demand. Prices also slid because Hurricane Ike closed 14 refineries along the Gulf Coast, which together make about 22% of all the gasoline produced in the US. But the refinery closures triggered a jump in gasoline prices by as much as 10 cents overnight in some states. (San Francisco Chronicle, Sept. 15)
The federal Minerals Management Service said at least 10 of the nearly 4,000 production platforms in the Gulf of Mexico were destroyed by Ike, compared to 2005’s record of 44 destroyed by Hurricane Katrina and 64 destroyed by Hurricane Rita. (Bond Buyer, Sept. 16)
See our last post on the oil shock.