September 14, 2008
By Jordan Burke and Aaron Clark
Sept. 14 (Bloomberg) -- Almost 20 percent of the U.S.'s oil refining capacity was shut after Hurricane Ike slammed into the Gulf Coast, limiting fuel deliveries and prompting the Department of Energy to release 309,000 barrels from its strategic reserves.
At least 13 refineries in Texas including plants operated by Exxon Mobil Corp., Valero Energy Corp. and Royal Dutch Shell Plc shut 3.64 million barrels a day of refining capacity as Ike approached Texas. Exxon and Shell said yesterday they would begin assessing damage of Gulf facilities as soon as weather permitted. Gulf refineries and ports are the source of about 50 percent of the fuel and crude used in the eastern half of the U.S. Analysts predict gasoline prices may again reach $4 a gallon.
"If these refinery outages go three weeks or more, most of the nation could see $4 gasoline again," Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University in Dallas, said in an telephone interview. "If they are back up in a week, it may be a 15- or 20-cent-a-gallon increase."
The U.S. Department of Energy said today it released a total of 309,000 barrels in crude from its Strategic Petroleum Reserve because of shortage in refineries owned by ConocoPhillips and Placid Oil along the Gulf Coast.
Read the full story.
Also see Bruce Bullock's blog, Energy IQ.
# # #