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Dear Wealth Daily reader:
Last night I had to meet an insurance agent to discuss options for homeowner’s insurance.
And let me tell you this guy was good. He sold me on everything. I’m still trying to figure it out for myself how I got sold on all this. You know what kind of cheapskate I am.
He sold me on homeowner’s insurance, car insurance, life insurance, boat insurance. And I don’t even own a boat!!!
So on my way home, as I was licking my wounds, I noticed gasoline at $2.87. This morning I drove by the same gas station and the price was ten cents higher. Ten cents in a matter of hours!?! Here we go again.
Houston Refiners at a Standstill
Depending on where Rita hits will really determine how much the increase in gasoline prices will rise.
Experts say Rita’s changing projected path and wavering power make it difficult to predict how much damage it will do to refineries on the Gulf Coast in Texas and Louisiana. But you can be certain she’ll do some damage.
Almost every major refinery around Houston and Port Arthur, Texas, 100 miles away on the Gulf Coast, is shut down ahead of Rita’s arrival. Together, the areas represent 20 percent of U.S. capacity.
“Best case, it costs us 2 million barrels a day (of refining production) for about three days. But if it hits Houston hard, four or five refineries could be flooded.
– Fadel Gheit, an energy analyst for Oppenheimer & Co.
Even if the Gulf Coast refineries escape serious damage, we will still have supply interruptions for two or three weeks that will lead to higher prices at the pump.
Oil prices have cooled off just a bit on news that Rita had weakened to a Category 3 storm. November futu$2.60 from opening.
By yesterday nearly three-fourths of the manned oil and gas platforms had been evacuated.
Oil production was only at about 8 percent of normal. That’s a loss of 1.38 million barrels of oil a day.
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Since the Katrina evacuations began on Aug. 26, the storms have cut 28.5 million barrels of oil production. That’s 5.2% of the Gulf’s annual production.
The best hope for Houston is that, unlike New Orleans, it is above sea level and 40 miles inland from the Gulf of Mexico.
Still, Houston engineering firm Dodson & Associates concluded in 2001 that a direct hit by a Category 5 hurricane would flood five big oil refineries, 36 chemical plants and an area twice the size of New Orleans.res dipped as low as $63.90 this morning, down
– Luke Burgess