Hurricanes Threaten Economy

By Armando Duke

Houston - With Hurricane Rita now a category 5 storm that's baring down on Texas' Gulf communities, the stock market is reacting negatively despite yesterday's CEO Outlook that said hurricane Katrina did not affect business or the US economy as much as some thought.

Though weather patterns in the Atlantic are sending more severe storms into the Gulf of Mexico, energy stocks and oil futures have been bouncing up and down over concern of further refinery and production disruption. In Texas, 25 percent of the nation's refineries are exposed to potential storm damage and that does not include the chemical industry there where much of the nations liquid hydrogen, ammonia and other chemicals are manufuactured - all along the Gulf.

Hurricane Rita, now measured as the third strongest storm on record, is expected to hit the coast sometime early Saturday morning. The governor of Texas this morning told residents in the Gulf communities to evacuate. This time FEMA is on-site working with local officials and emergency evacuations there are taking place.

Hurricane Katrina has cost 200,000 jobs so far and if Hurricane Rita causes as much damage, mostly in the form of storm surges and flooding, the unemployment figures could rise substantially.

If the storm is as bad as Katrina, once it hits land it could push gasoline prices even higher than Katrina's record-setting price. Heating oil and diesel fuel could also rise which will be felt in consumer goods as the costs of shipping rise.

With hurricane Rita moving slow it has time to increase in severity and warm water temperatures there are only fueling its growth so that by the time it makes landfall its wind speeds could be over 200 mph, far worse then when Hurricane Katrina hit New Orleans, weather forecasters say.