Sturm und Drang
My dystopian sensibilities were definitely piqued by CNN Money today.
Remember when gas spiked to $3-plus a gallon after Hurricane Katrina? By this time next week, that could seem like the good old days.Or how about Bloomberg's dystopians?
Weather and energy experts say that as bad as Hurricane Katrina hit the nation's supply of gasoline, Hurricane Rita could be worse.
Katrina damage was focused on offshore oil platforms and ports. Now the greater risk is to oil-refinery capacity, especially if Rita slams into Houston, Galveston and Port Arthur, Texas.
"We could be looking at gasoline lines and $4 gas, maybe even $5 gas, if this thing does the worst it could do," said energy analyst Peter Beutel of Cameron Hanover. "This storm is in the wrong place. And it's absolutely at the wrong time," said Beutel.
. . . "[Rita] could have a significant impact on supply and prices -- this really is a national disaster," Valero Energy (Research) CEO Bill Greehey in an interview with Reuters Tuesday evening.
"Rita is developing into our worst-case scenario," said John Kilduff, vice president of risk management at Fimat USA in New York. "This is headed right into our other major refining center just after all the damage done to facilities in Louisiana. From an energy perspective it doesn't get any worse."The week before Katrina hit, the national retail average for regular gasoline (all reformulations) was $2.612/gal., jumping 17.5% after the hurricane wiped out the Gulf Coast and knocked out 12.5% of national refining capacity. With Rita regular gasoline is already at a higher baseline -- $2.786/gal. -- and could knock out 15-20% of the country's refining capacity. With 5% of the US refining capacity still shut down due to Katrina and a market in which demand is constantly straining against supply, something could really snap this weekend.
I'm glad I filled the tank yesterday while Rita was still a nicely behaved tropical storm.