Gas prices leap as supply dwindles
Gasoline prices rose nationwide Wednesday as key refineries and pipelines remained crippled by Hurricane Katrina, crimping supplies and leading to caps on the amount of fuel delivered to retailers.
October gasoline futures surged as high as $2.92 a gallon on Nymex and settled at $2.6145 per gallon, an increase of 14 cents. That is 35 percent higher than they were on Friday.
Even before Katrina plowed through the Gulf Coast, oil producers and refiners had been struggling to meet rising demand around the globe, particularly in the U.S. and China. Energy markets have been on edge for about two years because the amount of excess oil production capacity worldwide is only about 1.5 million barrels a day, or less than 2 percent of demand.
“The hurricane has made a bad situation worse,” said oil analyst Fadel Gheit at Oppenheimer & Co. in New York.
Eight Gulf refineries remain out of service, and will be for days if not weeks, according to analysts, though most of their owners have not yet publicly announced the extent of any damage.
It could take a week to 10 days before refineries and pipelines will be able to draw power from the grid, John Zamanek, vice president of Entergy Corp. told CNBC.
Bush encourages others to help hurricane victims
President Bush pledged Wednesday to do “all in our power” to save lives and provide sustenance to uncounted victims of Hurricane Katrina but cautioned that recovery of the Gulf Coast will take years.
Flanked by senior members of his administration, Bush said more than 50 disaster medical assistance teams and more than 25 urban search and rescue teams, both from the Federal Emergency Management Administration, are being utilized to help victims of the storm.
Bush said the Transportation Department has provided trucks to convey 5.4 million ready-to-eat meals, 13.4 million liters of water, 10,400 tarps, 3.4 million pounds of ice, 144 generators, 20 containers of prepositioned disaster supplies, 135,000 blankets and 11,000 cots.
The president said the Pentagon, as well, was contributing to the rescue and relief operations, and the administration would make road and bridge repair a priority.
Bush also said he had instructed Energy Secretary Samuel Bodman to work with refineries to “alleviate any shortage through loans.”
In addition to the government’s efforts, Bush encouraged private cash donations to recovery efforts.
Chavez offers oil, anti-drug efforts to U.S.
CARACAS, Venezuela – The Rev. Jesse Jackson met with President Hugo Chavez in hopes of reducing tensions between the United States and Venezuela after conservative religious broadcaster Pat Robertson called for the leftist president’s assassination. Jackson urged both Venezuela and the U.S. to tone down their “hostile rhetoric,” adding that good relations are in both countries’ interests since Venezuela is a top supplier of U.S. oil.
“I hope that we’ve done something to facilitate a detente on threatening rhetoric,” Jackson said. “We’re not going to have an oil war.”
Chavez offered the United States cheap heating oil for poor communities and said he was willing to cooperate with the United States in anti-drug efforts, a program he recently suspended saying U.S. drug agents were involved in spying.
“In spite of the differences and the tense relations that exist, we’re always willing to continue working together with Mr. Bush’s government in the fight against drugs,” Chavez said, adding that it “cannot be a mask to carry out spying or violate a country’s sovereignty.”