Energy Prices Continue to Soar Due to Katrina
The impact of Katrina to the gulf coast has caused a corresponding impact to the cost of energy. Up to 90% of output from the Gulf Of Mexico remains closed today and the uncertainty surrounding how long it will take to get back online drove crude oil prices above $70. This region supplies approximately 25% of all US energy and is home to nearly 10% of US refinery capacity.
This short term impact on the cost of oil has many of the Alternative Energy stocks up with double digit percent gains yesterday.
Be very careful at this time. Many people will see stocks like Ballard up over 12% yesterday and will be anxious to start adding money to these stocks. If your a long term investor, now is not the time to be buying these stocks. The Katrina emergency has everyone rushing to find a place to put their money. These stocks will eventually settle down and I would be looking for lower prices after the emergency has ended.
If you already hold some of these positions, you may want to take some of your profits at this point or put some protective stop losses so that you can capture these gains. The entire energy sector has become a trading market and a little patience will enable you to put money into this sector with a lower cost basis.