Could Gas Reach $7 a Gallon After Rita?
A Forbes.com article sites experts that cite the unthinkable: $7 a gallon gas. Rita new track into the Port Arthur, Texas and Lake Charles, Louisiana area puts major oil refineries in harms way. Extensive flooding in Port Arthur, Tex., or Lake Charles, La., would cause prices to spike, possibly as high as $6 or $7 a gallon, doubling the widespread assumptions of $3-a-gallon gas that are expected in the aftermath. Either way, it’s going to be disruptive. With refiners shutting down and assuming 4 million barrels per day of capacity is shut in for at least five days, the lost production would amount to 20 million barrels. Gasoline, currently the tightest product, with inventories 500,000 barrels below the five-year average, “runs the greatest risk of tightness and price increases,” analysts say. (See: “Rita Recovery May Be More Protracted Than Katrina’s.”) “Rita will have a significant impact on petroleum product markets even without significant damage similar to Hurricane Katrina,” Merr
