Energy companies on Thursday were shutting down refineries that can produce nearly a quarter of U.S. gasoline, jet fuel and other oil products in advance of Hurricane Rita, a precautionary measure that threatens to push prices higher.
The amount of the damage to refineries on the Texas and Louisiana coast, and the length of time they remain idle, will determine the extent of price increases and the availability of the supplies, analysts said.
The hurricane was set to strike one of the nation’s most important refining hubs. “If you had to pick a single area, it probably ranks as the top one,” said David Freyman, a refining specialist at Barnes &Click Inc., an international consulting firm based in Dallas.
Even if Rita does not significantly damage refineries, a temporary shutdown will take gasoline off the market at a time when supplies already are tight and prices high. Isolated shortages of gasoline could occur after Rita strikes, as happened following Hurricane Katrina, officials said.
“It is very hard at this point in time to forecast either length of time where there may be disruptions or where they will occur,” Energy Secretary Samuel Bodman said. “But I think it likely to be that there will be some disruption in terms of supply of motor fuels.”
Bodman said the United States is expecting additional imports of gasoline, which could help offset lost production at refineries.
Refineries that can process more than 4 million barrels of oil a day were being shut down Thursday in an area stretching from Houston to Lake Charles, La.
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