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COPYRIGHT 2005 Voxant Inc.
Original Source: NIGHTLY BUSINESS REPORT
PAUL KANGAS, NIGHTLY BUSINESS REPORT ANCHOR: Oil prices fall in New York trading today as hurricane Rita falls to category three status, but crude prices are still near record highs. The storm is still closing in on the Texas coast and there is still great uncertainty about just how much damage it can do.
SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: They`ll be working on the levees again in New Orleans after rains from hurricane Rita break what had been fixed after Katrina. We`ll have the story.
KANGAS: Investors on Wall Street test the mettle of shares of Alcoa today. The stock price heads lower after the company warned of lower than expected earnings.
GHARIB: And tonight`s market monitor says she`s looking for a decent bull market over the next 18 months. Our guest is Elaine Garzarelli, president of Garzarelli Capital.
KANGAS: I`m Paul Kangas.
GHARIB: And I`m Susie Gharib. This is NIGHTLY BUSINESS REPORT for Friday, September 23.
Good evening, everyone. Energy prices fell sharply today as traders breathed a sigh of relief that hurricane Rita was tracking further to the east and away from key oil and gas facilities on the Texas coast. Rita was also downgraded to a category three storm. In New York, November crude futures tumbled $2.31 or 3.5 percent, to $64.19 a barrel. Wholesale gasoline fell 2.5 percent. We have two reports tonight looking at how hurricane Rita could affect the energy and chemical industries. We begin with Erika Miller in New York.
ERIKA MILLER, NIGHTLY BUSINESS REPORT CORRESPONDENT: As hurricane Rita swirls toward land, residents of Texas coastal cities continue to flee inland. Many businesses, including all of the Gulf coast refineries, have been shut down as a precaution. But at the New York Mercantile Exchange, many traders were betting Texas refineries would escape catastrophic damage.
IRA ECKSTEIN: What kind of happens a lot of times is you buy the rumor and sell the actual event. Traders are discounting the event. We don`t think it`s going to be as bad, as devastating, as you thought the first few days.
MILLER: There`s still plenty of uncertainty about exactly where the storm will hit. Many traders are betting Rita will skirt the major oil refining region near Houston. Plus, the Texas refineries are all above sea level, so there`s less potential for flood damage. That helps explain why crude oil futures for November delivery fell by more than $2 today to $64.19 a barrel. Many analysts predict prices will continue to drift lower.
ROBERT MORRIS, OIL ANALYST BANC OF America: They`ll probably settle down here between $55 and $65 a barrel. There`s certainly still a really big premium in the oil price for the lack of any global spare capacity, for the lack of refining capacity, for the geopolitical premium.
MILLER: Still, not everyone is confident Rita`s damage to oil infrastructure will be minimal. A group representing Texas oil companies warns hurricane Rita could potentially be more damaging to refining capacity than hurricane Katrina, which hit less than a month ago. The association says there could be extreme flooding in the key refining centers of Port Arthur and Beaumont, both in eastern Texas. Even as the Gulf coast braces for Rita, experts warn there could still be more ferocious storms to come.
MORRIS: Hurricane season, the peak is September, but it officially extends through November. So we`re not out of the woods as far as hurricanes yet here.
MILLER: This year`s hurricane season has been unusually active. And when that happens, experts warn winters in the northeast tend to be brutally cold. All of which could mean higher energy bills this winter. Erika Miller, NIGHTLY BUSINESS REPORT, New York.
STEPHANIE DHUE, NIGHTLY BUSINESS REPORT CORRESPONDENT: I`m Stephanie Dhue. 160 chemical plants lie in Rita`s projected path. Dow Chemical, Dupont and Chevron Phillips are among the companies that have shuttered plants in preparation...
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