Oil Prices Pump As Rita Eyes Texas

Crude oil prices neared $68 per barrel Thursday as Hurricane Rita closed in on Texas, raising fears it could cripple major production facilities largely untouched by Hurricane Katrina three weeks ago and drive up at-home energy costs this winter. According to Met's category 5 hurricane Rita weakened slightly early Thursday but that gives no cause for cheers as even with lesser winds Rita which is headed for the heart of U.S oil production poses a serious threat to capacity.

Light sweet crude for November rose 90 cents to $67.70 a barrel on the New York Mercantile Exchange. On London's International Petroleum Exchange, November Brent crude oil futures gained 71 cents to $65.44 a barrel.

Analyst are worried as Rita touches Texas coastline home to one fourth of U.S oil production while many refineries lay inoperative following hurricane Katrina in New Orleans.Posed with perhaps worst possible situation that policy and strategy makers can image oil production is at all time low relative to production to 100% capacity pre hurricane Katrina.

Meanwhile, the price of natural gas nearly twice last year's levels continued climbing, heightening concerns about the consumer squeeze from soaring heating costs this winter while gasoline and heating oil also touched record highs. Natural gas futures were up 44.6 cents to $13.04 per 1,000 cubic feet, gasoline rose 13.7 cents to $2.19 a gallon and heating oil added 3.6 cents to $2.075 a gallon.

Houston_Joins_Evacuation_as_Rita_Strengthens.jpgBy Wednesday, about 73 percent of total offshore oil production and 47.13 percent of natural gas output was shut in.

Together, Rita and Katrina have shut in 27.1 million barrels of crude, less than the 45 million barrels shut by last year's Hurricane Ivan over six months.

Nymex oil prices are more than 40 percent higher than a year ago, though still below the intraday record of $70.85 set Aug. 30 when Katrina made landfall in Louisiana, damaging numerous refineries and shutting down about 90 percent of Gulf Coast production capacity.