DALLAS - Oil companies said Monday that damage to their massive Texas refineries from Hurricane Rita appeared lighter than expected, but analysts still are predicting that retail gasoline prices may remain near $3 a gallon for weeks or even months longer.
That's a consequence of tight supplies and the fact that two weeks may be needed to restart all the closed refineries in Texas, Louisiana and Mississippi - more than a dozen in all. Combined with reports of Rita-related damage to rigs in the Gulf of Mexico, the idle refineries raised fears about shortfalls of heating oil and natural gas, fuels homeowners will use to warm their homes this winter. That uncertainty was evident on energy markets Monday as crude oil futures rose more than $1 a barrel and gasoline and natural gas futures also climbed. "We didn't dodge a bullet with Rita, we took a couple bullets in the legs with Katrina and Rita, said Tom Kloza, an analyst with the Oil Price Information Service of Wall, N.J. "It's still a significant loss, and it's going to create some supply problems through at least mid-October. Early estimates were that Hurricane Rita will cost U.S. refiners about 800,000 barrels a day in oil refining capacity, on top of about 900,000 barrels a day still down because of Katrina. Bill Veno, a director at consultant Cambridge Energy Research Associates, predicted roughly $3 a gallon at the gasoline pump into next year. "We still have the carryover of the impact from Katrina, and even though we didn't sustain as much damage with Rita, it's cumulative, he said. By the time Rita came ashore Saturday, it had weakened from a Category 5 monster to a Category 3 hurricane. The storm struck only a glancing blow at the Houston area, with the nation's largest concentration of oil refineries, but scored a direct hit around Port Arthur and Beaumont, in the southeast corner of Texas.
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State companies unhurt by storm Oklahoma City-based Kerr-McGee Corp. on Monday said it has completed an initial flyover of its Gulf of Mexico facilities and found no structural damage from Hurricane Rita. The company said it is returning workers to the Gulf to further assess the structures and prepare to restart production and drilling activities. Gulfport Energy Corp. of Oklahoma City said a flyover indicated damage to both of its south Louisiana production fields but that the main facilities are intact. Drilling is expected to restart today, but it was still unclear Monday when power would be restored to production facilities in the area. In Tulsa, Williams Cos. Inc. said Gulf of Mexico producers had restored supply to its Transco pipeline system, but that about 1.2 billion cubic feet per day was still shut in as of Monday afternoon. The pipeline transports natural gas from the Gulf Coast through Georgia and the Carolinas to the New York area and has a capacity of about 8.1 billion cubic feet. Tulsa’s Magellan Midstream Partners LP said Monday that initial assessments of its five marine terminals in the Texas and Louisiana Gulf Coast region have shown only minor damage from Hurricane Rita. Its facility in Marrero, La., however, still has dock damage from last month’s Hurricane Katrina, the company said. Tulsa drilling company Helmerich & Payne Inc. said it expects no significant damage to its offshore platform rigs from Hurricane Rita. The company’s onshore rigs, construction operations and facilities in the area also appear to have suffered little damage, H&P said Monday. Business Writer Adam Wilmoth