Oil prices rise following Hurricane Rita
Crude oil prices rose more than $1 a barrel yesterday, while the US oil industry assessed damage from Hurricane Rita.
Light, sweet crude rose $1.63 to settle at $65.82 on the New York Mercantile Exchange, after dropping to $62.65 earlier in the day.
On London’s International Petroleum Exchange, Brent crude for November rose $1.49 to settle at $63.93.
Rita gave only a glancing blow to crucial oil refineries in Texas, but consumers shouldn’t expect prices at the pumps to fall to pre-Katrina levels anytime soon.
Sixteen Texas oil refineries remained shut down after the storm, and crews found significant damage to at least one in the Port Arthur area.
This 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.
Seven facilities in Port Arthur and Beaumont, Texas, and Lake Charles, Louisiana, were without power from Hurricane Rita, which left the 255,000-barrel-per-day Valero Energy plant in Port Arthur the most heavily damaged. The facility faces at least two weeks of repairs.
The US Minerals Management Service said yesterday that 758 platforms in the Gulf of Mexico remained unstaffed.
Oil production in the gulf was totally shut down, and more than 78% of gas output was shut. Since Katrina hit a month ago, more than 34 million barrels of oil and 163 billion cubic feet of natural gas have been lost.
Elsewhere, France’s largest oil refinery, in Normandy, is likely to come to a complete halt as a strike over pay extends into its seventh day, oil company Total said.
Total said production will halt at the few units still operating at its 328,000-barrel per day refinery, which accounts for roughly 15% of France’s refining capacity.
US oil giant Chevron said it had restarted production at one of two oil platforms in Nigeria shut down last week because of threats from a southern militia, a company spokesman said. The Robertkiri facility produces 19,000 barrels of oil per day.
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