Gas Price Bullet Apparently Dodged

Analysts say Hurricane Rita's long-term impact on oil prices may not be significant.

Most refinery damage was light and, reports Michelle Miller, gasoline prices are down 20 cents a gallon nationwide from highs seen in Hurricane Katrina's wake.

If the storm had bowled a strike on the nation's No. 1 oil processing center, says Miller, oil and gas consumers would have been pinned under bad news.

"We would have been looking at apocalyptic price increases," observes Tom Kloza of the Oil Price Information Service.

But the storm pretty much spared the Houston area and headed instead for another refining region, the Port Arthur, Texas and Sabine, Louisiana vicinity.
Just before Rita hit, there were fears of a repeat performance of post-Hurricane Katrina gas price leaps, when prices spiked 40 cents to an average of more than 3 dollars a gallon, and even higher in some places.

And while damage is still being assessed, it's widely believed that Rita's impact on the pump won't be like Katrina's.

"We'll probably pay above $3, and that translates into about $400 million more than we paid last year, but it's not going to be the 4, 5 and $6 numbers most people have been talking about," Kloza says.

Still, adds Miller, hurricane season doesn't end until Nov. 30, and industry insiders say any more storms barreling through "Hurricane Alley" may bring 4, 5 or even $6 dollar a gallon gas back as possibilities.

"We're pretty advanced in the (storm names) alphabet," says Kloza, "and I hope Rita is one of the last we see impacting people and refineries."