US braced for pain from crippled oil production

A week after Hurricane Katrina ripped through America’s Gulf coast, estimates of the cost of repairing the stricken southern states and the potential effect on the US and global economies are growing daily.

Initially, economists thought that as the affected areas were relatively poor states, there would be a brief impact on the wider US economy before a rebuilding boom would help it recover, as happened after previous hurricanes.
But now it has emerged that the damage is much greater than first thought and the impact on oil and other commodity industries looks so severe that some experts fear the US economy could slow sharply, at least in the short term.

Guardian