Markets have an eye on Gustav
While the Gulf Coast braced for Hurricane Gustav, traders were watching to see the storm's effect on energy markets. Brett Neely reports from Berlin on what issues worry traders the most.
Stock traders in Frankfurt (Martin Oeser/AFP/Getty Image)
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Scott Jagow: Here are the numbers for the oil industry: 15 percent of the country's refining capacity is offline because of Gustav. Gulf Coast oil production is down to almost zero. Katrina damaged more than 100 oil platforms but the oil companies say they're much more prepared this time. And that's why the price of oil overseas is staying put this morning: $117 dollars a barrel. Brett Neely has this report on the European markets.
Brett Neely: For the most part, trading was calm across Europe this morning. But the worst case scenario -- a Katrina-style storm -- is on the minds of some traders, says fund manager Justin Urquhart Stewart.
Justin Urquhart Stewart: Really, the key issue isn't the amount of oil it's any damage to infrastructure. Remember, of course, we have no shortage of oil. What we do have, of course, is a shortage of refining capacity.
Exxon Mobil, Royal Dutch Shell and Valero are among the companies that shuttered refineries along the Gulf Coast on Sunday. About 15 percent of U.S. refining capacity has been shut down by Gustav. Oil trader Rob Lochland says the industry's emergency plans are far better now than three years ago.
Rob Lochland: But from the oil side of things, we would expect certainly there's a high likelihood that there's a normal resumption within days.
That expectation has kept the rise in oil prices modest, so far.
In Berlin, I'm Brett Neely for Marketplace.
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