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9/21/2005

No relief

Rita looks like it's going to be a big one, and the price of oil is rising:
Oil futures are trading higher, as experts predict the price for a barrel of crude could spike as hurricane Rita sweeps across the Gulf of Mexico in the coming days.

Concerns that Rita -- now upgraded to a category 5 hurricane -- will cause heavy damage to key oil facilities as it drives toward Texas were sending prices higher.

Workers who fled oil rigs as hurricane Katrina bore down on the Gulf of Mexico a month ago are leaving once again.

"They're not taking any chances," Fadel Gheit, a New York oil analyst with Oppenheimer & Co., told CTV News.

"There are mandatory evacuations in the Galveston area, and most of the operating companies near Texas City are preparing to shut down completely by this Friday. They believe, at best, they will be shut down for three days, maybe as long as a week."

BP PLC began closing its massive Texas City refinery on Wednesday. Marathon Oil Corp. and Shell Oil, meanwhile, did the same at their Houston area refineries.

Because the Lone Star State accounts for 25 per cent of the total U.S. oil output, analysts fear any disruption could send prices suddenly soaring.

"We have to remember here that almost 25 per cent of our refining capacity is concentrated within a 15 to 20 mile radius from the Houston area, so any impact could be substantial," added Gheit

Already on Wednesday, crude oil prices were up more than $1 US a barrel.

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