Hurricane shutters refineries on Gulf Coast
Monday, September 1, 2008 10:40 AM PDT
HOUSTON (AP) — Hurricane Gustav’s threat to the Gulf Coast halted about 15 percent of U.S. refining capacity Sunday, though for now prices at the pump have not risen dramatically.
However, analysts and others say a prolonged disruption in refining operations could cause price spikes of 20 cents per gallon or more, not unlike the surges after hurricanes Katrina and Rita devastated the region’s energy infrastructure three years ago. Exxon Mobil Corp., Royal Dutch Shell PLC and Valero Energy Corp., North America’s largest refiner, were among the companies that said they had shut down Gulf Coast refineries, primarily in south Louisiana.
Altogether, about 2.4 million barrels of refining capacity have been halted, roughly 15 percent of the nation’s total, according to figures from Platts, the energy information arm of McGraw-Hill Cos. The U.S. Gulf Coast is home to nearly half the nation’s refining capacity.
‘‘Fifteen percent looks small, but the impact is larger than meets the eye,’’ said Eswaran Ramasamy, director of Platts’ U.S. market reporting. ‘‘Louisiana refineries supply a chunk of the southern states’ product needs — gasoline, diesel, whatever.’’
For now, prices were climbing only slightly.
A gallon of regular gasoline jumped one-half cent overnight to a national average of $3.687, auto club AAA reported Sunday. The price rose slightly more than a penny Saturday.
The Energy Department said Sunday gasoline stocks were normal along the Gulf Coast for this time of year. Shell reported strong demand for gasoline at its stations along the Gulf Coast, though it said supplies remained strong.
Where prices go in the coming days and weeks depends largely on Gustav’s path and intensity.
