UPDATE 1-Hurricane Ike hits heart of U.S. oil sector
Sat Sep 13, 2008 11:15am EDT
(Updates with comment from emergency official, paragraphs 8-9)
By Erwin Seba
HOUSTON, Sept 13 (Reuters) - Hurricane Ike struck at the heart of the U.S. oil industry around Houston on Saturday, sending gasoline prices higher as about a quarter of the nation's oil production and refining capacity remained idled and under threat of damage from flooding and high winds.
U.S. President George W. Bush said the government would monitor gasoline prices to "make sure consumers are not being gouged" and added he was seeking to attract more foreign imports to make up for supply disruptions caused by the storm.
Gasoline prices across the United States rose more than 5 cents to $3.73 a gallon on average Saturday amid worries over thinning supplies, according to the AAA's daily price survey of more than 100,000 service stations.
"I would expect that we'll probably see further jumps over the weekend," said Geoff Sundstrom, spokesman for the AAA auto and travel group. "I think American consumers need to brace themselves for the possible return of $4 a gallon gasoline over the next few weeks."
The last time hurricanes shut down as much crude oil and refining production in the United States was in 2005 when hurricanes Katrina and Rita ripped through the region and devastated swaths of the Gulf Coast.
Already, some 13 refineries in Texas were shut down due to the effects of Ike, while another one in Louisiana was also shut in a slow recovery from Hurricane Gustav earlier in the month. [ID:nN12397053]
Together, the refineries account for 3.8 million barrels per day of gasoline, diesel and other fuel production, or about 22 percent of the nation's capacity.
As strong winds continued to batter Houston, a spokesman for the joint operations of southeast Texas emergency management agencies said the state's refineries appeared to have escaped heavy flooding so far.
But emergency officials were keeping a close eye on Port Arthur, Texas -- home to a handful of big refineries -- where a 13-foot (4-metre) storm surge was threatening the city's 14-foot (4.3 metre) levee, the spokesman said.
Ike also halted shipping and port operations along the Texas coast and led to the shutdown of several crude oil and fuel pipelines supplying other parts of the United States.
Offshore, oil companies shut more than 97 percent of their Gulf of Mexico oil production and more than 94 percent of their natural gas output, according to the latest data from the Minerals Management Service.
The Gulf is home to a quarter of U.S. crude oil production and 15 percent of U.S. natural gas production.
Offshore production was expected to recover fairly quickly, as Ike had veered just south and west enough to reduce the risk of damage to platforms, experts said. (Writing by Richard Valdmanis, Reporting by Bruce Nichols and Erwin Seba in Houston, Carey Gillam in Kansas City; Editing by Eric Beech) |
