Refilling fuel tanks after Ike to take weeks

HOUSTON (Reuters) – Oil refiners and producers on Thursday rushed to restore Gulf of Mexico production following Hurricane Ike, but energy traders and analysts warned it will take several more weeks to refill U.S. fuel inventories, increasing the risk of shortages.

At least five refineries were restarting out of 15 shut by Hurricane Ike that hit Texas on Saturday, while two switched off by Hurricane Gustav at the beginning of the month were restarting, as producers flew crews back to platforms across the Gulf of Mexico.


“They (The markets) are factoring in a quick return of refineries and are looking the other way regarding the gasoline situation,” said one trader, who asked not to be identified by name. “I think that’s a mistake.”

Gustav and Ike’s one-two punch sent national gasoline inventories to record lows according to statistics released by the U.S. Energy Information Administration on Wednesday, fueling a rebound in U.S. crude oil prices hammered by the dismal U.S. economic outlook as investment banks meltdown in the global credit crunch.

“Total refined products losses may top 80 million barrels,” Mark Kellstrom, analyst for Strategic Energy, said in a note.

Reuters