Sept. 22 (Bloomberg) -- Crude oil and gasoline rose for a second day as Hurricane Rita, the third-strongest Atlantic storm on record, heads toward Texas and threatens refineries.

The Louisiana Offshore Oil Port, the biggest U.S. petroleum import terminal, stopped unloading tankers as the hurricane moved through the Gulf of Mexico, a port official said. Royal Dutch Shell Plc, ConocoPhillips and Valero Energy Corp. are shutting down four refineries near Houston as Rita, a Category 5 storm, is forecast to hit the Texas coast on Sept. 24.

``That area is solid with refining capacity,'' said Gerard Burg, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. ``There's an element of panic in the market but that's not surprising given the lack of capacity worldwide at every level, refineries and oil wells.''

Crude oil for November delivery rose as much as 98 cents, or 1.5 percent, to $67.78 a barrel in after-hours electronic trading on the New York Mercantile Exchange. It traded at $67.47 at 11:57 a.m. Singapore time. Yesterday, oil rose to $66.80, after touching $68.27, the highest since Sept. 2. Oil has declined 4.8 percent from a record $70.85 on Aug. 30. Prices are 40 percent higher than a year ago.

Gasoline for October delivery rose as much as 6.69 cents, or 3.3 percent, to $2.12 a gallon in after-hours trading at 11:36 a.m. Singapore time. Yesterday, the contract surged 3.9 percent to $2.0531, the highest close since Sept. 6. The futures reached $2.92 on Aug. 31, an all-time high since trading began in 1984. Futures are 57 percent higher than a year ago.

Home to Refineries

Texas is home to the biggest concentration of U.S. refineries, accounting for 26 percent of the nation's total capacity. Four refineries in Louisiana and Mississippi, representing 5 percent of U.S. capacity, remain shut because of damages caused by Katrina last month.

``The Houston area is ground zero of the refining industry,'' said Rick Mueller, an analyst with Energy Security Analysis Inc. in Tilburg, the Netherlands. ``If it suffers the scope of damage caused to refineries in Louisiana by Katrina, we could see rationing and queues at the gas pump.''

Natural gas rose as much as 4.9 percent in New York as the hurricane headed toward production rigs in the Gulf of Mexico, an area that accounts for 24 percent of U.S. output.

Gas for October delivery on the Nymex gained as much as 62.6 cents to $13.220 per million British thermal units in electronic trading. The contract traded at $13.185 at 11:59 a.m. Singapore time. Yesterday, the contract reached $13.24, the highest since the futures started trading in 1990.

Shutting Plants

ConocoPhillips, Shell and Valero are slowing or shutting refineries as Rita moves toward the Texas coast. Shell yesterday began shutting down its Deer Park, Texas, refinery, the seventh- largest in the U.S., the company said in a statement. The shutdown will be complete by late Thursday morning and Shell can't give a schedule for resuming production, it said.

ConocoPhillips is shutting its Old Ocean, Texas, refinery, about 50 miles southwest of Houston. BP is pulling some workers from its Texas City refinery and shutting parts of the plant, the nation's fourth largest, spokesman Neil Geary said yesterday.

Valero, the largest U.S. refiner, said it is closing its plants in Texas City and Houston, with the shutdowns expected to be completed by midday Thursday local time. The two facilities can process a total of 378,000 barrels of crude oil a day.

The National Weather Service has issued a flood watch for the Texas coastline, including Galveston, because of Rita. Exxon Mobil Corp.'s Baytown, Texas, oil refinery, the nation's largest, is located along the Houston Ship Channel inland from Galveston. A spokesman said the company was releasing non-essential personnel from the facility.

`No Slack'

``We didn't have a surplus of refining before Katrina,'' said Larry Goldstein, president of PIRA Energy Group, a New York consultant. ``There is basically no slack left in the system, and you don't have to have a Katrina-type impact to have a devastating impact on the industry right now.''

BP, Exxon Mobil, Chevron Corp. and ConocoPhillips have evacuated staff from platforms in the Gulf, a region that's responsible for 30 percent of U.S. oil output.

Katrina and Rita have shut 1.1 million barrels, or 73 percent, of daily crude-oil output in the region, according to a report yesterday from the U.S. Minerals Management Service, which manages offshore resources. That was almost 15 percentage points more than the previous day.

Rita gained force over the Gulf, matching the strength of Katrina when it made landfall. Katrina shut 95 percent of offshore production in the region, closed eight refineries and slowed operations at about 10 others.

`Potentially Catastrophic'

Rita was upgraded to a Category 5 storm, the maximum on the Saffir-Simpson scale of intensity, after trading ended yesterday. The storm, packing winds of near 175 mph, was about 570 miles east-southeast of Galveston and moving west at about 9 mph, with hurricane-force winds extending up to 70 miles from the center, the National Hurricane Center said at 10 p.m. Houston time. The storm is ``potentially catastrophic,'' it said.

Rita is the third-most intense hurricane on record in the Atlantic, behind Gilbert in 1988 and the 1935 Labor Day hurricane, the hurricane center said in an update at 6:50 p.m. Houston time.

Once the hurricane hits and the damage is assessed, prices may decline again, said Antonio Szabo, chief executive of Houston- based consultant Stone Bond Technologies.

``In the oil market there is a lot of emotion and a little bit of, I would call it, hysteria even,'' Szabo said in a televised interview. ``Prices go up, and then when the damage is assessed, even if it is relatively large, a little bit of sanity starts to prevail.''

OPEC

The Organization of Petroleum Exporting Countries, which pumps about 40 percent of the world's oil, agreed at its meeting in Vienna two days ago to effectively suspend its quota system for the first time since the 1990 Gulf War. OPEC estimates its members can pump another 2 million barrels a day. The offer of additional barrels starts Oct. 1 and lasts three months.

Consuming nations have a responsibility to invest in refineries and to lower taxes if they want lower fuel prices, OPEC President Sheikh Ahmad Fahd al-Sabah, who is also Kuwait's oil minister, said. Taxes make up 62 percent of fuel prices in the U.K. and 24 percent in the U.S., according to OPEC.

The OPEC basket price for oil, which is a weighted average of several types of crude, is expected to be between $35 and $40 a barrel in the ``long term,'' Mohammad Alipour-Jeddi, the group's head of analysis, said today in Seoul. The basket price was $58.30 on Sept. 20.

To contact the reporters on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net.

Last Updated: September 22, 2005 00:17 EDT