Katrina Impact On Economy

Total damage from Hurricane Katrina, including uninsured items, could be as high as $40 billion, according to some Economists.

Hurricane Katrina closed down 95 percent of Gulf Coast crude oil production and 88 percent of the Gulf Coast natural gas output. Eight refineries, producing more than 10 percent of U.S. refining capacity, were shut down.

There are also some concerns that a fresh, even temporary, spike in energy costs as a result of damage to the Gulf region's oil infrastructure may be one shock too many.
Crude oil prices had already doubled in 18 months prior to Hurricane Katrina, which only adds to growing fears of a housing bubble, rising short-term interest rates and swelling trade deficits which could affect the wider economy.