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NEW YORK -- This year’s hurricane season might well be defined by Ike, a storm so fierce forecasters said residents not evacuating from the Galveston, Texas, area could face "certain death."
As residents flee, analysts are looking with trepidation at oil futures. The Oil Price Information Service (OPIS) reported last week gasoline trading on the Gulf Coast is "absolutely frantic," with wholesale prices nearing $5 a gallon. BusinessWeek reported that figure is twice what gasoline futures were trading for on the New York Mercantile Exchange.
The U.S. Minerals Management Service reported the 1.25 million barrels per day of oil production—95 percent of the output on federal waters in the Gulf—is still shut down due to Hurricane Gustav, whose punch wasn’t as strong as feared.
Bill Day, a spokesperson for Valero Energy, told BusinessWeek two of its largest facilities, located in Houston and Texas City, Texas, were shut down in preparation of Ike. Following suit, ConocoPhillips stated on its Web site that its Sweeny (Texas) refinery is closed, while its Lake Charles (Louisiana) plant is operating at reduced rates.
As operations slow, supply and demand will become a leading issue this week, Michael Fields, president of the South Carolina Petroleum Marketer’s Association, told The Post and Courier.
"You don’t want to alienate your customers, but you have to take a bit of a measure now so … they’ve got enough gas," he told the paper.
Sanford, N.C.-based The Pantry Inc., which owns more than 1,600 convenience stores in 11 Southern states, was posting voluntary 10 gallon rationing signs at all its stations ahead of the storm’s landfall, although the company was unsure if forthcoming shipments would be limited.
"We wanted to head off any panic buying," CEO Pete Sodini told the News & Observer. "What you're going to do if you go out and fill up every car in the household [is that] you're going to run this market out of supply temporarily."
Meanwhile, Greenville, N.C.-based Spinx Co., instituted a temporary 10 gallon per customer policy before the storm as well, according to a report on GreenvilleOnline.com
"I think the overriding thing is to encourage people not to freak out," company President Stewart Spinks told the paper. "Keep calm."