Hurricanes Rita and Katrina have knocked about 29 percent of U.S. crude-oil refining capacity offline and forced shutdowns of pipelines that supply the Midwest and Northeast, raising the prospect of fuel shortages.
At least 15 refineries, accounting for about 24 percent of U.S. capacity, were closed in Texas and Louisiana this week for Rita, which is forecast to come ashore near the border between the two states tomorrow. Four others have been closed since late August because of damage or flooding from Hurricane Katrina.
U.S. gasoline surged above $3 a gallon at the pump for the first time after Katrina disrupted supplies, and prices may rise even higher if Rita strikes a similar blow to the region's refineries.
"If some of these facilities can get into a start-up mode on Sunday or Monday, it may limit the impact" on fuel supplies, said Ed Malloy, president of Danaher Oil Co., a Fairfield, Iowa, fuel broker. "But if there is damage and there is anything significant to deal with, then we're going to be in a catastrophic situation, supply-wise."