September 27, 2005 in Business

Rita’s damage to refineries limited, but gas to stay pricey

Associated Press
 

DALLAS — Oil companies said Monday that damage to their massive Texas refineries from Hurricane Rita appeared lighter than expected, but analysts are still predicting that retail gasoline prices may remain near $3 a gallon for weeks or even months longer.

That’s a consequence of tight supplies and that fact that it may take weeks to restart all the closed refineries in Texas, Louisiana and Mississippi — more than a dozen in all. Combined with reports of Rita-related damage to rigs in the Gulf of Mexico, the idle refineries raised fears about shortfalls of heating oil and natural gas, fuels homeowners will use to warm their homes this winter.

That uncertainty was evident on energy markets Monday as crude oil futures rose more than $1 a barrel and gasoline and natural gas futures also climbed.

“We didn’t dodge a bullet with Rita, we took a couple bullets in the legs with Katrina and Rita,” said Tom Kloza, an analyst with the Oil Price Information Service of Wall, N.J. “It’s still a significant loss, and it’s going to create some supply problems through at least mid-October.”

The good news was that retailers around the country said there was less panic buying than after Hurricane Katrina struck.

Jay Ricker, president of Ricker Oil Co. in Anderson, Ind., which owns about 30 stores and supplies gasoline to 30 more, said he saw fewer fearful motorists topping off their tanks. “There was very little panic buying this time,” he said. “There’s just not enough capacity to fill everybody’s tank.”

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