NEW YORK -- Crude oil futures spiked to more than $70 a barrel for the first time as Hurricane Katrina took dead aim on America's oil and refinery operations Monday, shutting down an estimated 1 million barrels of refining capacity and sharply curbing offshore production in the region.
The area targeted by Katrina is crucial to the United States' energy infrastructure _ offshore oil and gas production, import terminals, pipeline networks and numerous refining operations throughout southern Louisiana and Mississippi.
Oil companies evacuated workers and shut down more than 600,000 barrels of daily production in the Gulf. Refiners closed down more than 1 million barrels of refining output by Sunday, but that amount could be higher because not every producer reports data, said Peter Beutel, an oil analyst with Cameron Hanover.
"This is the big one," he said. "This is unmitigated, bad news for consumers."
"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.
The market has been on edge for months, with traders and speculators buying on the slightest fear. With Katrina, all those fears could be realized, Beutel said.
Full article at: http://www.washingtonpost.com/wp-dyn/content/article/2005/08/28/AR2005082800598.html
