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Refineries closed as Rita nears

Oil, gas prices surge on hurricane worries

Oil firms began closing Texas refineries yesterday, threatening the US supply of gasoline as Hurricane Rita grew more violent and took aim at a stretch of Gulf coast that holds one-fourth of the nation's oil-refining capacity.

If Rita swamps Houston as Hurricane Katrina did to a three-state area along the Gulf of Mexico last month, experts warn, the storm will take more dollars from motorists' wallets and add to the problems of the nation's airlines.

BP PLC began closing its Texas City, Texas, refinery. Marathon Oil and Shell Oil did the same at their refineries near Houston. Shell's refinery kept running through the last major Texas hurricane, Alicia in 1983.

Combined, the damage from Katrina and the precautionary evacuations due to Rita have slashed normal Gulf oil production of 1.5 million barrels a day by 73 percent, the US Minerals Management Service said yesterday.

Since Katrina evacuations began Aug. 26, the storms have cut more than 27 million barrels of oil production, or 5 percent of the Gulf's annual production. Natural gas production was 47 percent below normal yesterday.

Oil prices climbed more than $1 a barrel yesterday, as traders calculated the possibility that Rita could damage oil-industry facilities on land or in the Gulf. Heating oil jumped nearly 3 cents to $2.0387 a gallon, while gasoline rose more than 7 cents to $2.05 a gallon.

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