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Gas Prices Hinge on Path of Hurricane If Rita Hits Gulf Coast Refineries, Midlands Motorists May Wince Again.

Posted on: Tuesday, 20 September 2005, 21:00 CDT

Drivers in Nebraska and Iowa could again feel the pinch at the pump if Hurricane Rita hits Gulf Coast refineries this weekend.

Whether gas prices go up -- and how much -- depends on the path and the intensity of the latest hurricane, said Rose White, spokeswoman for AAA Nebraska.

Gasoline prices have been falling in the two states. The average price today for regular unleaded was $2.69 in Nebraska and $2.66 in Iowa.

In Omaha, prices for regular unleaded gasoline have dropped to about $2.60 per gallon and lower.

But White said that prices could approach levels recorded this month after Hurricane Katrina. Gas prices in Nebraska, Iowa and other parts of the country soared above $3 after Katrina knocked out Gulf Coast refineries three weeks ago.

White said if the hurricane veers south, away from the Gulf Coast refineries, gas prices could drop. But if Rita strikes Texas, the biggest oil refiner in the country, the industry could see serious disruption.

Texas has 26 petroleum refineries, most of which are along the coast, with the capacity to pump 4.6 million barrels a day. That's more than a quarter of the total U.S. refining capacity, according to the Energy Department.

Rita started as a tropical storm and strengthened into a hurricane this morning as it moved toward Florida's southern coast and the Keys with strong winds and rain, posing a new threat to the battered Gulf Coast.

Anadarko Petroleum Corp., a U.S. oil company, plans to close its Marco Polo platform 160 miles south of New Orleans as Rita heads toward the Gulf of Mexico.

The company has evacuated 47 nonessential workers from the platform and will remove the 15 remaining essential workers later today, Anadarko spokeswoman Margaret Cooper said.

"Gulf producers are going to have to shut down because of Rita,'' said Doug Hohertz, an analyst at the Mitchell Group in Houston that invests in oil and gas stocks. "Given the strains on transportation, it's going to take even longer to bring production levels back to normal.''

Chevron Corp., Royal Dutch Shell Plc and BP Plc started evacuating workers Monday.

Oil prices fell today after rising a day earlier by more than $4 a barrel -- the biggest one-day price jump ever. Light, sweet crude for October delivery on the New York Mercantile Exchange fell $1.05 to $66.34 a barrel by afternoon in Europe.

The Organization of Petroleum Exporting Countries agreed today to make available 2 million extra barrels of oil a day in an effort to reassure markets edgy over supplies for the winter and storms threatening to cause more damage to Gulf refineries.

OPEC said it would offer the extra oil for three months starting Oct. 1, but its output ceiling would remain unchanged at 28 million barrels a day.

Oil ministers decided against raising the output quota by 500,000 more barrels a day. But both options were seen as largely symbolic: The cartel already is pumping about 28.5 million barrels a day, and making extra crude available will not change the fact that the world's refineries can't keep up with demand.

This report includes material from the Associated Press, Bloomberg News and the New York Times.

Source: Omaha World - Herald

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