Rita could equal $5 gas
The timing and strength of the latest storm could cause worse spike at the pumps than Katrina did.
By Chris Isidore, CNN/Money senior writer
NEW YORK (CNN/Money) - 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. 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.
Michael Schlacter, chief meteorologist for private weather service Weather 2000, said that it now appears the eye of Rita could come ashore near Port Arthur, Texas, near the Texas-Louisiana border, sometime Saturday morning. The forecast from the National Hurricane Center puts the most likely track of the storm a bit further west, coming ashore between Galveston, Texas and the border.
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Tippee said that natural gas prices could see a further spike, since so many of the offshore platforms off of Texas produce natural gas, not crude oil. And while gasoline imports have helped bring gas prices down from record highs, there isn't as much potential for heating-oil imports, he noted.
"Gasoline tends to obscure everything, especially since we aren't paying heating bills right now," said Tippee. "But we were already looking at a winter fuel problem. We're about to take another hit that will cause a lot of problems."
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http://money.cnn.com/2005/09/22/news/economy/rita_threat/index.htm?cnn=yes
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