Mellody Hobson: How Did Hurricane Rita Affect Our Oil Supply?

ByABC News via logo
September 26, 2005, 9:51 AM

Sept 26, 2005 — -- We had feared the worst of Hurricane Rita, but fortunately it didn't cause as much damage to the oil refineries as it might have. But oil production has been temporarily reduced because of power outages and refineries that were shut down in anticipation of the hurricane. "Good Morning America" financial contributor Mellody Hobson talked about what Rita's aftermath could mean for gas and oil prices.

The Houston region accounts for about 25 percent of the nation's oil refining capacity. Fortunately, because of Rita's path, we didn't see the level of destruction that we all had feared. Only two of the region's many refineries were damaged. Those refineries will take a couple of weeks to repair and get running again. That's bad news. But certainly, it's not as bad as it could have been.

We also have to remember that in preparation for the storm, the oil companies shut down more than a dozen refineries. All offshore oil productions in the area were also shut down. So we're losing about 1.5 million barrels of oil a day because of the shutdown. But nearly all those refineries and oil platforms will be running normally very soon.