But post-Gustav picture appears better than after Katrina and Rita
Hurricane Gustav may be long gone, but more than a dozen Gulf Coast refineries remained shut down Wednesday, raising the specter of higher gasoline prices if the plants don't reopen soon.
Some refiners were waiting to restart plants until damage reports were complete, while others were scrambling just to restore power in a region where more than a million people were still without electricity.
Even so, U.S. consumers should not see big hurricane-related spikes in pump prices like those seen after the 2005 hurricanes, analysts said.
Refineries and other key infrastructure appear to have suffered far less damage with Gustav than they did with Katrina and Rita, boosting chances they will restart in days rather than weeks. Falling oil prices and weaker U.S. gasoline demand this year could also blunt the storm's effect on pump prices, they said.
"If this had occurred in May or June, or even early July, you might have seen a spectacular reaction to the upside," said Tom Kloza, chief oil analyst with the Oil Price Information Service in Wall, N.J., referring to peak summer periods for gasoline demand.
Gustav, however, should create only some "kinks" in the distribution system and not send prices much higher than normal for this time of year, he said.
Refineries and other key infrastructure appear to have suffered far less damage with Gustav than they did with Katrina and Rita, boosting chances they will restart in days rather than weeks. Falling oil prices and weaker U.S. gasoline demand this year could also blunt the storm's effect on pump prices, they said.
"If this had occurred in May or June, or even early July, you might have seen a spectacular reaction to the upside," said Tom Kloza, chief oil analyst with the Oil Price Information Service in Wall, N.J., referring to peak summer periods for gasoline demand.
Gustav, however, should create only some "kinks" in the distribution system and not send prices much higher than normal for this time of year, he said.
The average U.S. price for regular gasoline fell a fraction of a penny Wednesday to $3.68 a gallon, while diesel rose nearly a cent to $4.27 a gallon, according to AAA's Daily Fuel Gauge Report.
Gustav hit Monday west of New Orleans as a weaker-than-expected Category 2 hurricane. Ahead of the storm, many refiners in southern Louisiana and East Texas halted production or reduced output.
Two days later, 13 Gulf Coast refineries representing 2.5 million barrels a day of capacity remained closed, the U.S. Department of Energy said. That's roughly 14 percent of the nation's 17.5 million barrels per day of refining capacity.
Another 10 refineries in the region were running at reduced rates, the department said.
But refiners, including Exxon Mobil Corp., Valero Energy Corp., ConocoPhillips and Shell, said they were working to resume normal operations as quickly as they can.
"We continue to monitor the situation closely and will return personnel and resume operations as soon as safely possible," said Prem Nair, spokeswoman for Exxon Mobil, whose Baton Rouge and Chalmette, La., refineries were still closed Wednesday.
Marathon Oil Corp., meanwhile, said it had planned to restart its largest refinery Wednesday night, according to Bloomberg News. The Garyville, La., plant was shut down before Gustav arrived.
William Veno, industry analyst with Cambridge Energy Research Associates, said strong fuel profit margins provide "plenty of incentive" for refiners to get up and running soon.
He predicted downed Gulf Coast refineries will return in phases and that robust U.S. gasoline stockpiles will help dampen the effect of plant outages on pump prices.
Elsewhere Wednesday, offshore oil and natural gas producers, pipeline companies and operators of other key infrastructure were also racing to return to business.
Though nearly all oil and natural gas production in the Gulf of Mexico was still halted, several oil companies and drillers were hoping to begin redeploying evacuated workers Wednesday.
Markets, however, continued to shrug off Gustav. Light, sweet crude for October delivery fell 36 cents to settle at $109.35 a barrel on the New York Mercantile Exchange, after dipping as low as $107.22.
Natural gas futures rose less than half a penny to settle at $7.264 per million British thermal units.
Meanwhile, the Louisiana Offshore Oil Port, a key hub for imported oil near Grand Isle, La., remained closed as of Wednesday morning, the Energy Department said. The so-called LOOP, which handles about 12 percent of the nation's crude imports and is tied by pipeline to about half the nation's refining capacity, was still doing damage assessments, the department said.
In addition, oil and gas pipelines in the region were expected to restore service as early as today, and 22 major natural gas processing plants that were shut down have reported no major damage to facilities and were expected to resume operations as gas begins to flow, the Energy Department said.
By BRETT CLANTON Copyright 2008 Houston Chronicle
Gustav hit Monday west of New Orleans as a weaker-than-expected Category 2 hurricane. Ahead of the storm, many refiners in southern Louisiana and East Texas halted production or reduced output.
Two days later, 13 Gulf Coast refineries representing 2.5 million barrels a day of capacity remained closed, the U.S. Department of Energy said. That's roughly 14 percent of the nation's 17.5 million barrels per day of refining capacity.
Another 10 refineries in the region were running at reduced rates, the department said.
But refiners, including Exxon Mobil Corp., Valero Energy Corp., ConocoPhillips and Shell, said they were working to resume normal operations as quickly as they can.
"We continue to monitor the situation closely and will return personnel and resume operations as soon as safely possible," said Prem Nair, spokeswoman for Exxon Mobil, whose Baton Rouge and Chalmette, La., refineries were still closed Wednesday.
Marathon Oil Corp., meanwhile, said it had planned to restart its largest refinery Wednesday night, according to Bloomberg News. The Garyville, La., plant was shut down before Gustav arrived.
William Veno, industry analyst with Cambridge Energy Research Associates, said strong fuel profit margins provide "plenty of incentive" for refiners to get up and running soon.
He predicted downed Gulf Coast refineries will return in phases and that robust U.S. gasoline stockpiles will help dampen the effect of plant outages on pump prices.
Elsewhere Wednesday, offshore oil and natural gas producers, pipeline companies and operators of other key infrastructure were also racing to return to business.
Though nearly all oil and natural gas production in the Gulf of Mexico was still halted, several oil companies and drillers were hoping to begin redeploying evacuated workers Wednesday.
Markets, however, continued to shrug off Gustav. Light, sweet crude for October delivery fell 36 cents to settle at $109.35 a barrel on the New York Mercantile Exchange, after dipping as low as $107.22.
Natural gas futures rose less than half a penny to settle at $7.264 per million British thermal units.
Meanwhile, the Louisiana Offshore Oil Port, a key hub for imported oil near Grand Isle, La., remained closed as of Wednesday morning, the Energy Department said. The so-called LOOP, which handles about 12 percent of the nation's crude imports and is tied by pipeline to about half the nation's refining capacity, was still doing damage assessments, the department said.
In addition, oil and gas pipelines in the region were expected to restore service as early as today, and 22 major natural gas processing plants that were shut down have reported no major damage to facilities and were expected to resume operations as gas begins to flow, the Energy Department said.
By BRETT CLANTON Copyright 2008 Houston Chronicle
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