Oil futures pay no heed to hurricane

Hurricane Ike held little sway over oil futures, which briefly slipped below $100 a barrel Friday, but was felt at the gas pump as the focus shifted from offshore oil and natural gas platforms in the Gulf of Mexico to the giant refineries that stand in the storm's path.

The breadth of the hurricane forced the precautionary shutdown of 13 Texas refineries, idling plants that process about 3.5 million barrels of oil a day and reducing operations at others – about 25 percent of U.S. refining capacity.

The pipelines that serve the refineries also have closed, halting regular deliveries of gasoline and diesel fuel to the Midwest and East Coast markets, and also to places such as Colorado and Arizona. Ports that handle fuel and oil imports and exports are closed as well.

The nationwide average price for regular self-serve gasoline ended a lengthy slide, ticking up less than a penny Friday to $3.67 a gallon, according to AAA's daily price survey. But some motorists in Texas and other affected states were confronted by pump prices above $5 a gallon.

If all goes well, the refineries and pipelines could be restarted in a week to 10 days – and consumers may not see much of a bump up beyond the jumps already hitting some stations. But if, as expected, Hurricane Ike brings with it both devastating winds and 20-foot storm surges, refineries could be flooded and disabled for weeks or months.

In the Gulf Coast region, gasoline supplies were already stretched because of refinery closures related to Hurricane Gustav. Though many of those plants have restarted, the wholesale price of gas in Houston has been rising sharply amid fears that the situation will worsen. That supply squeeze would spread much more widely if there are lengthy outages among the refineries.

Offshore, 97 percent of the Gulf of Mexico's crude oil production was shut down Friday and more than 93 percent of the natural gas production, according to the Minerals Management Service, an arm of the Interior Department.

Many platforms were already getting a thrashing from Ike on Friday – and damage could be greater than expected because of the storm's size – but most of the facilities were farther east and not expected to take a direct hit.

Oil prices shrugged off Ike and continued to decline, dipping below $100 a barrel Friday for the first time in more than five months. On the New York Mercantile Exchange, the cost of light sweet crude for October delivery fell as low as $99.99 a barrel, but finished the day at $101.18, up 31 cents.

Oil consumption has slackened with a struggling U.S. economy, and refinery outages further reduce demand.