29 August 2005: Hurricane Katrina hits the Gulf Coast
Hurricane Katrina made landfall near New Orleans, causing catastrophic flooding and enormous loss of life. It also shut down a large share of Gulf of Mexico oil production and many refineries. Oil prices briefly spiked above $70 a barrel and gasoline prices jumped across the US. Insurers faced record claims. The storm showed how concentrated energy infrastructure can turn a regional disaster into a national price shock.
The lesson: Concentrated supply chains turn local disasters into nationwide price shocks very quickly.
What it meant for investors
$1,000 in Crude oil (barrel) at the start of 2005 → $1,512 today, vs $5,763 in the S&P 500.
We start the clock at the start of 2005, the year it happened. That is 1.5 times the money, but $4,251 less than a plain index fund made over the same years.
What Crude oil (barrel) teaches: You cannot easily own oil itself, only futures contracts; the negative print of April 2020 showed that storage and contract mechanics can dominate supply and demand.
| Bought in | Price then | Worth today | S&P 500 would be |
|---|---|---|---|
| 2005 | $43.00 | $1,512 | $5,763 |
| 2007 | $60.00 | $1,083 | $4,789 |
| 2008 | $95.00 | $684 | $4,626 |
green = beat the S&P 500 · red = lost money
What if you bought Crude oil (barrel)? Every starting year and the full story →
More Crude oil (barrel) history
- 17 January 1991: Oil collapses as Desert Storm begins
- 20 March 2003: The Iraq War begins
- 20 April 2020: US oil prices go negative
- 11 July 2008: Oil peaks at $147 a barrel
- 17 October 1973: Arab oil producers wield the oil weapon
- 26 November 2021: Omicron spoils Black Friday
Could you have called it at the time? The wheel picks the year, you pick the position, ten seconds a pick.
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