Rita leaves refineries in good shape but consumers face short-term shortage

Signs that Gulf Coast energy producers survived Hurricane Rita largely unscathed sent oil futures falling on Sunday, but analysts said consumers were likely to face tight supplies and higher prices — at least until refineries shut by the storm come back on line.

A rapid recovery for refiners hinges on power being restored to parts of Texas and Louisiana where facilities are concentrated, and Entergy Corp. said Sunday it will be several days before the full extent of what it described as significant damage is known.

"I'm not sure there should be a rush to exuberance here, even though we dodged a bullet," said oil analyst John Kilduff of Fimat USA in New York.

Nonetheless, energy traders seemed to breathe easier about fuel supplies knowing that oil platforms, pipelines and refineries were not hit as badly by Rita as they were by Hurricane Katrina.

The Coast Guard said Sunday it flew over offshore oil and natural gas platforms hugging the Gulf Coast, and checked in by telephone with refineries and chemical plants in the region, and that it did not see or hear about any major damage. "The initial report is good at this time," Chief Warrant Officer Adam Wine said.

A barrel of light crude for November delivery was quoted at $63.10 in evening trading on the New York Mercantile Exchange, down $1.13. Trading was very light, and prices ranged from $62.65 to $63.44 as traders assessed the storm damage.

Heating oil dropped 5.70 cents to $1.8950 per gallon, while unleaded gasoline fell 10.41 cents to $1.9875 per gallon.

On London's International Petroleum Exchange, which also opened trading earlier than usual, Brent crude futures tumbled $2.59 to $62.01.

The Nymex and IPE both extended electronic trading over the weekend in hopes of reducing the kind of volatility that followed Katrina. But trading was light.

Kilduff said oil prices could fall below $60 a barrel within a week if no major damage to Gulf Coast energy infrastructure emerges.

"My worry for a gasoline price spike is short term, really a one- to two-week window," he added.

On Sunday, the average retail cost of gasoline nationwide was $2.78 a gallon on Sunday, up 2 cents from the day before and 90 cents higher than a year earlier, according to the Oil Price Information Service of Wall, N.J.

Sixteen refineries shut down in anticipation of Rita and four remain shuttered almost a month after Hurricane Katrina, taking out more than 19 percent of the nation's fuel-manufacturing capacity.