September 27, 2005
The hurricane damage to Gulf of Mexico oil refineries was lighter than expected, but that hasnt stopped the price of oil from marching higher. Crude oil prices jumped more than $1 a barrel Monday as traders worried that supplies will not meet demand for heating oil in the months ahead.
Traders also bet that gas prices would continue to rise. Gasoline futures rose more than four cents to $2.1292 a gallon, after falling as low as $1.94. Heating oil rose nearly 11 cents to $2.0586 a gallon. Natural gas rose nearly 12 cents to $12.44 per million British thermal unit.
Hurricane Rita delivered only a glancing blow to important oil refineries in Texas, but that doesnt mean gasoline prices will come down any time soon. In fact, most energy analysts predict motorists will see increases in gas prices in the coming week, though not nearly as large as the post-Katrina spike.The average price a month ago, a few days before hurricane Katrina hit, was $2.60.
Meanwhile, the Department of Energy reports 16 Texas oil refineries remain shut down after the storm, and crews found significant damage to at least one in the Port Arthur area. The outages could lead to petroleum product shortages and further aggravate the heating oil and natural gas markets, which are usually volatile ahead of the winter months.
