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The Honolulu Advertiser
Updated at 6:11 a.m., Sunday, September 14, 2008

Gas prices surge in Ike's wake

Associated Press

HOUSTON— Gasoline prices surged again today, above $5 a gallon in some places, as oil companies, refiners and others began sorting out the damage from Hurricane Ike's lashing of the petroleum-rich Gulf of Mexico and the region's mass of refineries.

Fears of supply shortages, and actual fuel-production disruptions, led to pump price disparities of as much as $1 a gallon in some states, and even on some blocks.

Overnight, prices nationwide rose an average of more than 6 cents for a gallon of regular gasoline, to $3.795, according to auto club AAA, the Oil Price Information Service and Wright Express. That followed another 6-cent jump between Friday and Saturday.

Overnight changes in the national average for gas are usually measured by tenths of a cent.

Average prices in a number of states have already reached or exceeded $4-per gallon.

Illinois, Indiana, Michigan, South Carolina, Hawaii and Alaska all had an average per-gallon cost above $4 on Sunday, according to AAA.

But in places like Knoxville, Tenn., a gallon of gas was $5.19 at one location. In Muscle Shoals, Ala., the sign outside at least one station listed a price of $5.30.

Meanwhile, two weeks after Hurricane Gustav shut down production and closed a dozen refineries in Louisiana, those same companies were sending out crews Sunday to assess damage.

Late Saturday the U.S. Minerals Management Service said there were two confirmed reports of drilling rigs adrift in the central Gulf of Mexico. Spokeswoman Eileen Angelico said the rigs were about 100 miles off the Louisiana coast.

The Department of Energy said 14 Texas refineries had been shut down because of Ike. In Louisiana, refineries were just coming back online after Hurricane Gustav.

Valero Energy Corp., North America's largest refiner, said Sunday assessment crews had found no significant structural damage to production units at Valero's refineries at Houston, Texas City and Port Arthur.

The company said crews were working with local power providers to get electricity, though it had no timetable for when production would resume.

"Gulf Coast pipelines that carry crude oil and refined products to other parts of the country are also experiencing outages, which will further complicate the supply situation," Valero said.

The San Antonio-based company said its Memphis refinery was operating at reduced rates because of the pipeline issues.

Valero said its three other Gulf Coast refineries were operating at planned rates.

The Department of Energy said Sunday it had agreed to deliver 200,000 barrels of emergency exchange oil from the Strategic Petroleum Reserve to ConocoPhillips' Wood River refinery in Roxana, Ill.

The department said it also will deliver an additional 109,000 barrels of emergency exchange oil from the Strategic Petroleum Reserve to Placid Oil's Port Allen, La., refinery along a Shell pipeline in Louisiana.

The oil was requested by ConocoPhillips and Placid because of supply disruptions. The deliveries were to begin Sunday.