Initially it looked like there might be good news about the future of
gas and oil prices. However, it turns out that several of the refineries
have been damaged or flooded and may be offline longer than hoped.
And there has been record damage from Hurricane Rita to the oil rigs in the Gulf of Mexico according to a Financial Timesnews story. Many of the large oil rigs are damaged or missing.
ODS-Petrodata, which provides market intelligence to the offshore oil and natural gas industry, said it expected a shortage of rigs in the US Gulf this year.
"Based on what we have right now, it appears that drilling contractors and rig owners took a big hit from Rita," said Tom Marsh of ODS-Petrodata. "The path Katrina took was through the mature areas of the US Gulf where there are mainly oil [production] platforms. Rita came to the west where there is a lot of [exploratory] rig activity."
Ken Sill of Credit Suisse First Boston said: "Early reports indicate numerous rigs are missing, destroyed or have suffered serious damage and several companies have yet to report. Rita may set an all-time record."
The US Coast Guard said nine semisubmersible rigs had broken free from their moorings and were adrift.
This news has sent oil and gas prices climbing again. Gas prices have risen
just a few cents in the past couple days but could climb more in the near future. Currently, the Fuel Guage Report has the national average price for gas at $2.81.
President Bush seemed to confirm the gas supply troubles when he
urged people to drive less. The International Herald Tribune
reported on Bush's request.
He added that if Americans could avoid going on "a trip that's not essential,"
that would be "helpful."
He also issued a directive for all federal agencies to cut their own energy
use and to encourage employees to use public transportation.
Yes, the same administration that once gave tax breaks to consumers buying huge SUVs is now encouraging Americans to drive less. All of the oil rigs in the Gulf have not yet been checked so it will be a while before the full extent of the damage caused by Rita is known.
