Ike Skips Town and Spares Refineries

Ike stormed ashore this weekend and everyone feared the worst. With Galveston hit by the storm surge and millions in damage in Houston’s downtown, gas prices in the Gulf shores were jumping to $5 and $6 per gallon. The Texas coast and vicinity is home to 20 percent of the nations oil refinery capacity.

Galveston Refinery

As if markets didn’t have enough to worry about with the possible collapse of Lehman Brothers come Monday, the additional burden of spiking gas prices wouldn’t come as welcome news to Wall St. The good news started to emerge early Sunday as the preliminary damage assessment of the region’s refineries was better than expected. Many of the closed plants would be back online in the matter of a couple of days versus a 1-2 week initial guess.

With the drop of crude to the $100/barrel mark for the first time in months, this may be the silver lining for which we have been looking.

Oil Falls to Six-Month Low as Refineries Escape Major Damage – Bloomberg.com