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Post Info TOPIC: By the ned of Ike


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By the ned of Ike
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Ike Damages Oil Platforms, Gas Prices Spike

HOUSTON (CBS News) Gasoline prices surged again in the U.S. on Sunday, above $5 a gallon in some places, as oil companies, refiners and others began sorting out the damage from Hurricane Ike's lashing of the petroleum-rich Gulf of Mexico and the region's mass of refineries.

Fears of supply shortages, and actual fuel-production disruptions, led to pump price disparities of as much as $1 a gallon in some states, and even on some blocks.

Later on Sunday, federal officials say it appears Hurricane Ike destroyed a number of production platforms and damaged some of the pipelines in the Gulf of Mexico.

Lars Herbst, regional director for the U.S. Minerals Management Service, said Sunday that flyovers revealed that at least 10 production platforms were destroyed by the storm.

Herbst stressed the assessments were preliminary, but the damage appeared far worse than that caused by Hurricane Gustav two weeks ago.

Specifics about the size and production capacity of the destroyed platforms were not immediately available.

Overnight, prices nationwide rose an average of more than 6 cents for a gallon of regular gasoline, to $3.795, according to auto club AAA, the Oil Price Information Service and Wright Express. That followed another 6-cent jump between Friday and Saturday.

Overnight changes in the national average for gas are usually measured by tenths of a cent.

Average prices in a number of states have already reached or exceeded $4-per gallon.

But in places like Knoxville, Tennessee, a gallon of gas was $5.19 at one location. In Muscle Shoals, Alabama, on the Gulf Coast, the sign outside at least one station listed a price of $5.30.

Meanwhile, two weeks after Hurricane Gustav shut down production and closed a dozen refineries in Louisiana, those same companies were sending out crews Sunday to assess damage.

Late Saturday the U.S. Minerals Management Service said there were two confirmed reports of drilling rigs adrift in the central Gulf of Mexico. Spokeswoman Eileen Angelico said the rigs were about 100 miles off the Louisiana coast.

The Department of Energy said 14 Texas refineries had been shut down because of Ike. In Louisiana, refineries were just coming back online after Hurricane Gustav.

Valero Energy Corp., North America's largest refiner, said Sunday assessment crews had found no significant structural damage to production units at Valero's refineries at Houston, Texas City and Port Arthur.

The company said crews were working with local power providers to get electricity, though it had no timetable for when production would resume.

"Gulf Coast pipelines that carry crude oil and refined products to other parts of the country are also experiencing outages, which will further complicate the supply situation," Valero said.

The San Antonio-based company said its Memphis refinery was operating at reduced rates because of the pipeline issues.

Valero said its three other Gulf Coast refineries were operating at planned rates.

The Department of Energy said Sunday it had agreed to deliver 200,000 barrels of emergency exchange oil from the Strategic Petroleum Reserve to ConocoPhillips' Wood River refinery in Roxana, Illinois.

The department said it also will deliver an additional 109,000 barrels of emergency exchange oil from the Strategic Petroleum Reserve to Placid Oil's Port Allen, Louisiana, refinery along a Shell pipeline in Louisiana.

The oil was requested by ConocoPhillips and Placid because of supply disruptions. The deliveries were to begin Sunday.

© 2008 CBS Broadcasting Inc. All Rights Reserved.



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