Refineries Brace for Hurricane Ike

Fuel prices are rising as Hurricane Ike threatens oil refineries on the Gulf Coast of Texas and Louisiana. Oil refineries shut down in the brunt of what might be the worst storm in Texas in half a century. Gasoline wholesale prices and crude oil futures rose Friday in anticipation of the storm, after oil closed Thursday at a six-month low of $100.87 a barrel on the New York Mercantile Exchange. Crude rose 21 cents Friday to close at $101.08. Ike, a Category 2 hurricane on Friday, is scheduled to make landfall near Galveston, Texas, early Saturday with winds in excess of 100 mph. Its path was further south and west of Hurricane Rita, which came ashore as a Category 3 hurricane in September 2005, near the Texas-Louisiana border, causing extensive damage to regional refineries and sending diesel and gasoline prices soaring to then-record highs. Forecasters say the 800-mile-wide storm will bring a huge storm surge to Galveston and Houston areas, home to many refineries and petrochemical plants. Gulf Coast refineries represent 23% of domestic oil-processing capacity. About 19% of U.S. refining capacity is being shut down in anticipation of Ikes landfall. The Louisiana Offshore Oil Port, the biggest U.S. oil- import terminal, closed its marine operations, as did Port Fourchon, a major intake facility for Gulf oil.

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YouTube | September 14, 2008

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