Energy Complex Lucks Out

As most of the Texas energy complex appears to have ducked the harsh winds of Hurricane Rita, many refiners and consumers are breathing a sigh of relief.

Although the devastation of the latest major hurricane to hit the Gulf Coast is widespread along the coast near the Texas-Louisiana border, it could have been much worse. Original predictions that the storm could tag the Texas coast near the energy-rich center between Houston and Galveston had many prognosticators fearing the worse.

Instead, the storm took a northeasterly route and made landfall Saturday morning near Port Arthur, Texas, and Lake Charles, La. While still rich with energy infrastructure, less dense refining capacity combined with a weaker-than-feared storm (a Category 3 is still major, just not cataclysmic as the Category 5 storm many thought would make landfall) made for much less drama and damage than first feared.

The reaction of commodity traders provided a glimpse of how lucky many think Texas was. In a rare Sunday session at the NYMEX, which opened to allow traders to react to Rita news before the workweek began, crude was down over $1.50 a barrel to $62.65. Heating oil and gasoline were also trading lower, a sign traders believe the refining impact of Rita will be small, especially compared to its evil sister Katrina. ...