Hurricane Rita, one of the strongest storms on record, drove oil prices past $68 a barrel yesterday as more than a million Texans fled inland leaving behind evacuated oil fields and shuttered refineries.
The National Hurricane Center called the Category 5 storm " potentially catastrophic" and raised a hurricane watch covering a stretch of coastline that's home to a quarter of America ' s refineries.
Rita, with sustained winds clocked at 175mph, is thought likely to make landfall late today or early tomorrow near Freeport, Texas, some 40 miles southwest of Galveston and 60 miles due south of Houston.
November-dated crude-oil futures on the New York Mercantile Exchange added another $1.34 to hit $68.14 a barrel, nearing the $69.66 last seen on September 2, two days after Hurricane Katrina pounded the Louisiana and Mississippi coasts.
London Brent crude was up 74 cents at $65.47.
"There is an awful lot of potential for damage," said Mark Keenan of London-based fund MPC. Certainly for product prices, the only way is up."
Saudi Foreign Minister Saud al-Faisal warned that the world energy crisis had reached a "very dangerous" situation, with lack of refining capacity a major cause.