Ike pushes gasoline prices back toward $4

HOUSTON -- From Florida to Tennessee, and all the way up to Connecticut, people far from Hurricane Ike's destruction felt one of its tell-tale aftershocks: gasoline prices that surged overnight — to nearly $5 a gallon in some places.

Fears of supply shortages, and actual fuel-production disruptions, resulting from Ike's lashing of vital energy infrastructure led to pump price disparities of as much as $1 a gallon in some states, and even on some blocks.

Late Saturday the U.S. Minerals Management Service said there were two confirmed reports of drilling rigs adrift in the central Gulf of Mexico.

Compounding the jitters and higher costs for gasoline retailers was the fact that some big refineries along the Gulf Coast had been shut for nearly two weeks following Hurricane Gustav. Power outages caused by Ike threatened to keep millions of gallons of gasoline output idled for at least several days.

Emergency officials on Sunday said Texas refineries appeared to have escaped major flooding — a sign production could rebound quickly once power is restored — but that could take days and oil companies warned the effects of Ike could still lead to a temporary crunch.

"Chevron is concerned about severe gasoline supply disruptions in the wake of Hurricane Ike. It may not be possible for us — and other manufacturers — to maintain normal supplies in the coming days," the company said in a news release.

Some 15 Texas oil refineries, including the giant ExxonMobil refinery in Baytown, were shut as a precaution ahead of the storm, while another in Louisiana remained shut in the wake of Hurricane Gustav two weeks ago.

Together, the refineries make up just under a quarter of U.S. fuel production capacity.

Ike also shut down crude oil production in the Gulf of Mexico, a quarter of U.S. output, along with the bulk of shipping, port and pipeline operations on shore, hindering the transport of fuel to other parts of the country.

The U.S. Environmental Protection Agency has relaxed clean air fuel regulations in 11 states to ease any supply disruptions resulting from the storm.