No Decision Yet On Oil Reserves

President Bush Weighs Authorizing Tapping Into U.S. Petroleum

(CBS/AP) 
On Friday, the Nymex crude oil contract fell more than a dollar to $66.13 a barrel as many traders took profits on forecasts that Katrina would likely little affect U.S. refineries and production facilities in the Gulf of Mexico.

"But then the storm reloaded over the weekend, gained strength and set on a path toward the oil facilities," Shum said. "The people who sold on Friday are probably kicking themselves now."

Unlike last year's Hurricane Ivan, which only hit the edge of the oil and natural gas producing areas in the central Gulf of Mexico, Katrina is plowing right through the heart of that region.

"If this thing knocks out significant quantities of refining capacity ... we're going to be in deep, dark trouble," said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York.

PVM Oil Associates in Vienna, Austria, said Katrina had the potential to do more damage to southeastern Louisiana than Ivan, which damaged seven platforms, 100 underwater pipelines and shut down production at some facilities for several months.

Some analysts had said the only way to rein in surging prices would be for the United States to tap some of its petroleum reserves.

Oil companies evacuated workers and shut down more than 600,000 barrels of daily production in the Gulf.

ChevronTexaco Corp. evacuated all workers in the eastern and central Gulf of Mexico and nonessential workers in the western Gulf late Saturday, but company spokesman Matt Carmichael said Chevron would continue to produce 90 percent of its normal production by remote.

Royal Dutch-Shell Group, BP PLC and ExxonMobil Corp. also evacuated offshore workers by Saturday.

The Louisiana Offshore Oil Port, the largest oil import terminal in the United States, evacuated all workers and stopped unloading ships on Saturday.

Shell estimated 420,000 barrels of oil and 1.35 million cubic feet of gas per day will be shut in at its central and eastern Gulf facilities. ExxonMobil said it has ceased daily production of 3,000 barrels of oil and 50 million cubic feet of gas.

French oil company Total SA said Monday it has joined the growing list of producers to evacuate from Katrina. Staff began leaving Friday, said Total spokesman Paul Floren.