Rita’s toll on oil facilities is less than feared

Signs that Gulf Coast energy producers survived Hurricane Rita largely unscathed sent oil futures falling on Sunday, but analysts said consumers were likely to face tight supplies and higher prices while refineries shut by the storm come back on line.

A rapid recovery for refiners hinges on power being restored to parts of Texas and Louisiana where facilities are concentrated, and Entergy Corp. said Sunday it will be several days before the full extent of what it described as significant damage is known.

“I’m not sure there should be a rush to exuberance here, even though we dodged a bullet,” said oil analyst John Kilduff of Fimat USA in New York.

Nonetheless, energy traders seemed to breathe easier about fuel supplies knowing that oil platforms, pipelines and refineries were not hit as badly by Rita as they were by Hurricane Katrina.

The Coast Guard said Sunday it didn’t see or hear about any major damage as it flew over offshore oil and natural gas platforms hugging the Gulf Coast and checked in by telephone with refineries and chemical plants.

A barrel of light crude for November delivery was quoted at $63.10 in evening trading on the New York Mercantile Exchange, down $1.13. Heating oil dropped 5.7 cents to $1.895 per gallon. Electronic trading was extended over the weekend in hopes of reducing the sort of volatility that followed Katrina.

Kilduff predicted oil prices could fall below $60 a barrel within a week if no major damage to Gulf Coast energy infrastructure emerges.

Sixteen refineries shut down in anticipation of Rita and four remain shuttered almost a month after Hurricane Katrina, taking out more than 19 percent of the nation’s fuel manufacturing capacity.

Sporadic gasoline shortages and higher prices are possible in the week ahead, oil analyst Peter Beutel of Cameron Hanover Inc. said, but he was encouraged by what he considers to be a significant psychological shift among energy traders.

“It seems at this point that the market is focusing more on the fact that the damage was less severe than expected, than on the fact that there was damage,” he said. “The worst is behind us.”