Well with all due apologies to the beatles Rita isn’t exactly as lovely as she seemed. Now she’s past her prime the insurance companies amongst others are busily counting the cost.
And on top of the obvious comes news that Rita really is number one: according to the FT she “has caused more damage to oil rigs than any other storm in history and will force companies to delay drilling for oil in the US and as far away as the Middle East, initial damage assessments show”.
So just to get things straight: the temporary supply bottleneck just got a little longer (this time my apologies to Ry Cooder) and finding more oil to raise output capacity just got a little harder. I haven’t got an envelope handy, but I don’t think I need to do too many complicated calculations to work out that if this is for real then oil prices can stay higher for longer and global growth will, as a consequence, be just a touch lower.
Meantime Econbrowser James Hamiliton explains why you shouldn’t be counting on getting too much relief from oil shale.