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Katrina will screw Venezuela.

Oil is now over $70 per barrel and rising. So how does this screw Venezuela?
Hurricane Katrina is poised to take out the only supertanker offloading facility in the US. It also could destroy or damage at least 8 refineries in the Louisiana and Mississippi areas.

If this happens the price of Gas will be well over $3 per gallon at the pump for most of the US. In some places it will hit $4. However the world price of crude will drop because there will be no accessible market if they can't unload their product in the short term. Venezuela will be forced to sell to Europe and Asia at a reduced price (along with the rest of other oil producing countries)

At $4 a gallon, the average US driver will find other means to move his or her body from point A to point B, either car pooling, bicycle, tele-commuting, etc.

This will further depress the world crude prices.

I'm not predicting Venezuela will go bankrupt, however it isn't going to be an easy ride for them.
Katrina Targeting U.S. Oil Operations 29.Aug.2005 00:14

ap

NEW YORK -- With crude oil prices already at record levels, a hurricane targeted the heart of America's oil and refinery operations Sunday, shutting down an estimated 1 million barrels of daily production and threatening to curtail refining activity in the region.

Katrina, a Category 5 storm expected to strike near New Orleans early Monday, was churning through the Gulf of Mexico. The area is crucial to the nation's energy infrastructure _ offshore oil and gas production, import terminals, pipeline networks and numerous refining operations throughout southern Louisiana and Mississippi.

The hurricane followed a path similar to the one taken last September by Ivan, which caused heavy damage and reduced the region's output for months. Yet Katrina's 175-mph wind was fiercer.

Oil companies have evacuated workers and closed at about 1 million barrels of daily production in the Gulf, but that amount could be higher because not every producer reports data, said Peter Beutel, an oil analyst with Cameron Hanover.

"It's not looking real friendly here. This is unmitigated, bad news for consumers," he said.

Gasoline prices could see the largest spikes because so many refineries in the region could be shut down by flooding, power outages, or both, energy analysts said.

The U.S. has ample crude oil supplies, even if major hurricane destruction trims Gulf oil output and foreign imports, but refining capacity is extraordinarily tight. As a result, prices for gasoline, heating oil, jet fuel and other products have flirted with records and could go even higher this week.

"If this thing knocks out significant quantities of refining capacity ... we're going to be in deep, dark trouble," said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York.

The market has been on edge for months, with traders and speculators buying on the slightest fear. With Katrina, all those fears could be realized, Beutel said.

"Basically I could spill a can of oil at my local gas station and you'd see the price of crude go up by $1 per barrel," he said, predicting futures would likely top $70 per barrel in coming sessions.

Crude settled at $66.13 a barrel Friday on the New York Mercantile Exchange, down $1.36 after hitting $68 last week.

In many ways, Katrina was expected to be inconsequential to the energy industry, with many traders selling on Friday as the storm moved across Florida and was seen as moving north and striking the Florida Panhandle as a tropical storm with little impact. That all changed Saturday, when the system gained power and charged west, directly into areas of offshore oil production.

ChevronTexaco Corp. completed evacuations of all workers in the eastern and central Gulf of Mexico and nonessential workers in the western Gulf late Saturday, company spokesman Matt Carmichael said.

Chevron has about 2,100 employees and contractors working in the Gulf, Carmichael said. Chevron will continue to produce 90 percent of its normal production by remote as long as weather cooperates, he said.

The Louisiana Offshore Oil Port, which processes loads from tankers too large for mainland ports, evacuated all workers and stopped unloading ships on Saturday morning said Mark Bugg, the terminal's manager of scheduling. The LOOP, 20 miles offshore, is the nation's largest oil import terminal and handles 11 percent of U.S. oil imports.

Royal Dutch-Shell Group evacuated more than 1,000 offshore workers by Saturday. Only those in the far west remained, the company said on its Web site. BP PLC and ExxonMobil Corp. also brought workers ashore Saturday.

Shell estimated 420,000 barrels of oil and 1.35 million cubic feet of gas per day will be shut in at its central and eastern Gulf facilities. Exxon Mobil said it has ceased daily production of 3,000 barrels of oil and 50 million cubic feet of gas.

Valero Energy Corp. evacuated all but a few workers at its 260,000-barrel-a-day St. Charles refinery on Saturday. Murphy Oil Corp. also shut down its 120,000-barrel-a-day Meraux, La., refinery, and Exxon Mobil Corp. planned to shut down its 183,000-barrel-a-day refinery in Chalmette, La.

Motiva Enterprises, a joint venture of Royal Dutch Shell PLC and state-owned Saudi Arabian Oil Co., began implementing hurricane contingency plans at its 225,000-barrel-a-day Norco refinery on Saturday. Motiva also was exploring contingencies for its 235,000-barrel-a-day Convent refinery, about 45 miles west of New Orleans, Dow Jones Newswires reported.


Venezuela should sell ALL their exported oil to China 29.Aug.2005 07:15

Not a problem

I don't see a problem with Venezuela unable to sell oil to the USA. They shouldn't want to sell any oil to the USA after the US government and media allows Pat Robertson to make death threats against Chavez. Venezuela should cripple the US economy by selling all their oil to China. Let the USA "suffer" from higher gas prices while China welcomes the additional oil to build their growing infrastructure.

If the Venezuela economy suffers by getting a lower price from China than they would from the USA, that's what they get for having their economy dependent upon the environmental destruction caused by oil drilling.

As of writing this, it looks like Katrina isn't nearly as destructive as the Chicken Littles claimed she would be.

But US is Venezuela's #1 trading partner 29.Aug.2005 12:54

Capturing Moods

Lets be realistic here. Despite Chavez's complaints Venezuela still depends heavily on the US for international trade. Any immediate interruptions to this will severely impact the nation.

4 bucks a gallon 29.Aug.2005 17:31

is not enough

to get americans off their lard asses and seek alternative transportation
maybe 8 bucks a gallon, but not a mere 4