Scenarios: Much could go wrong for Obama in 2012

President Barack Obama speaks on Memorial Day at the amphitheater at Arlington Cemetery in Arlington, Virginia, May 30, 2011.

WASHINGTON (Reuters) - President Barack Obama looks well placed to win a second term next year, but that could change dramatically in the 17 months before the election.

Although the sluggish U.S. economy remains the major challenge of his presidency, anything from a spike in gasoline prices or economic catastrophe to a natural disaster or foreign policy crisis could complicate the Democratic president's road to re-election before the November 6, 2012 vote.

Here are some scenarios of what could go wrong for Obama and his team.

ECONOMIC PERILS

The U.S. jobless rate is seen as the biggest economic problem facing Obama. It has been hovering around 9 percent, and experts say his re-election prospects would be much brighter if it were closer to 7 percent by autumn 2012. The number, however, shows no sign of improving quickly.

Economists say the U.S. economy must grow by at least 3 percent every quarter to lower the jobless rate, but gross domestic product slowed to only 1.8 percent in the first three months of the year.

"Unless we get GDP above 3 percent consistently, then the unemployment rate is going to hover in the 8-9 percent range," said Patrick O'Keefe, director of economic research at J.H. Cohn in New Jersey.

Another crisis and slowdown in the U.S. housing market, whose downturn led the country into the last recession, would also dampen the outlook for Obama.

And economic chaos resulting from a failure to raise the U.S. debt limit could roil financial markets as well as the U.S. economy.

Another "too big too fail" bailout of a corporation or financial institution whose failure would be seen as threatening to the U.S. or global economy is an additional possible threat.

The Treasury Department spent billions of taxpayer dollars to prop up Wall Street two and a half years ago, infuriating many Americans. Obama could face voter fury if it happens again.

GASOLINE PRICE SPIKE

U.S. voters are already unhappy with gasoline prices of about $4 per gallon, which they find uncomfortably high, and any event that caused a spike up to $6 or $7 per gallon would be bad news for Obama.

"High gas prices take a real toll on people psychologically because they see them every day when they pull up to the pump," said Ryan McConaghy, director of the economic program at the centrist Third Way think tank.

But experts say it would take an extreme and unlikely event, such as Israel bombing Iran over Tehran's nuclear program, to generate such a severe price increase.

Gas prices are expected to fall. In a Reuters poll in May, analysts forecast Brent crude would average $108.80 a barrel this year, easing to $107.20 in 2012 from the current $116.

FOREIGN POLICY DISASTER

The 1979-1981 Iranian hostage crisis helped spur Democratic President Jimmy Carter's defeat in the 1980 election. Any president is vulnerable to a problem on the world stage if his administration's response is seen as inadequate.

Americans generally pay relatively little attention to foreign policy, so it would take a major crisis to affect the 2012 election. But with U.S. forces involved in Afghanistan and Iraq and in Libya through NATO, Obama could be vulnerable if the situation in any of the three wars worsens.

Voters also are inclined to rally around a president in times of crisis, as with Republican President George W. Bush after the September 11, 2001, attacks on New York and Washington.

Obama has been largely inoculated from charges that he is weak on security issues -- a favorite Republican attack on Democrats -- because of the killing of Osama bin Laden by U.S. forces last month.

'OBAMA'S KATRINA'

An environmental or natural disaster, like the earthquake and tsunami in Japan, could dent Obama's re-election hopes, if it appeared that the government was uncaring or its response to the crisis was incompetent.

A perceived slow response to Hurricane Katrina's devastation in New Orleans in 2005 by the Bush administration hurt Republicans in the 2006 congressional elections and the 2008 election that brought Obama to power.

Some Republicans criticized the Obama administration's response to last year's BP oil spill in the Gulf of Mexico as his "Katrina," because it took so long to cap the gushing undersea well. But the crisis ended after three months, BP paid out millions in damages, and the criticism did not stick.

SCANDAL

A major scandal like the Whitewater controversy over President Bill Clinton's real estate investments or the Iran-Contra affair involving clandestine arms sales under President Ronald Reagan could dim perceptions of Obama.

But Obama's first term has been free of scandal, and claims by some Republicans that his administration is corrupt have not been substantiated. "Birthers" contended for years that Obama was not born in the United States, which would make him ineligible to be president, but that controversy largely disappeared after Obama released a longer version of his birth certificate in April that showed he was born in Hawaii.

(Additional reporting by Lucia Mutikani; Editing by Alistair Bell and Paul Simao)