The Guardian (UK): Rita fears raise oil prices: “The Anglo-Dutch company Shell evacuated staff from its offices in the oil city of Port Harcourt in the Niger Delta, a region that accounts for most of Nigeria's 2.4 million barrels a day output.”: Thursday September 22, 2005
By Mark Tran
Oil prices today rose to more than $68 (£38) a barrel amid fears that Hurricane Rita will damage oil and gas plants in Texas barely weeks after the havoc wrought by Hurricane Katrina in the New Orleans area.
Six refineries in Texas have shut down as Rita, a maximum category 5 storm with 175mph winds, bears down on the state. Rita, even more powerful than Katrina, is expected to hit Texas, home to a quarter of US refining capacity, early on Saturday.
The six closed refineries in Texas have a total daily capacity of 1.4 million barrels. Together with the four still closed in Louisiana and Mississippi after Katrina, around 14% of US refining capacity is out of action.
British oil firm BP has started shutting its refinery in Texas City, the third-largest in the US. With a capacity of 460,000 barrels a day, it alone accounts for 3% of US petrol supplies.
Oil prices have come under pressure in recent years not just from strong demand from the US and China, but also a shortage of refineries. The big oil companies have had little incentive to invest in refining because of low profit margins. Now refineries are working at full capacity.
As the oil and gas industry braced itself for Rita, US light crude oil was up $1.21 at $68.01 a barrel in early afternoon trading, just below yesterday's three-week high of $68.27. London Brent crude was up 85 cents at $65.58.
"There is an awful lot of potential for damage," Mark Keenan of London-based fund MPC told Reuters.
Unrest in oil-producing countries was also unnerving the markets. The arrest of a Nigerian warlord over "treasonable" comments this week brought his supporters to the streets. Any violence threatens to disrupt supplies from the world's eighth largest oil exporter.
The Anglo-Dutch company Shell evacuated staff from its offices in the oil city of Port Harcourt in the Niger Delta, a region that accounts for most of Nigeria's 2.4 million barrels a day output. Concern about the upsurge of violence in Iraq and unease over Iran's secretive nuclear programme were also putting pressure on oil prices.
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