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Journalism of Courage
Oil and gasoline prices moved sharply higher on Monday over concerns about Hurricane Katrina’s impact on oil production and refining in and along the Gulf of Mexico. Cautioning that it would take time to assess the full impact of the storm on the industry, analysts said oil, natural gas and gasoline supplies, already stretched, could take days or weeks to recover from the hurricane.
Initial concerns about production quickly shifted to refineries that dot the coast and produce much of the 9.5 million barrels of gasoline Americans consume a day. At least nine refineries accounting for 2 million barrels of oil a day, or 12 percent of American refining capacity, have already been shut down, the Energy Department reported.
Analysts said even more refineries could go off line and it will take companies at least a few days to assess damage, work to restore electricity and deal with flooding.
“The crunch is on refineries,” said Roger Diwan of PFC Energy, an oil consultancy in Washington.
Crude oil for October delivery was up $1.87 a barrel, or 2.8 per cent, to $68.00 on the New York Mercantile Exchange around midday, after climbing as high as $70.80 a barrel in overnight trading. — NYT
