Sept. 22 (Bloomberg) -- Gasoline and crude oil surged for a second day as Hurricane Rita bore down on the Texas coast, threatening the nation's largest concentration of refineries.

``One of the biggest hurricanes ever is headed for the heart of America's refining capacity,'' said Jason Schenker, an economist at Wachovia Corp. in Charlotte. ``Prices will hit new records if we get reports of flooding and other destruction once the storm passes.''

Exxon Mobil Corp., Royal Dutch Shell Plc and Valero Energy Corp. are among the companies that shut plants as Rita neared. Rita is Category 5 storm, the most intense level on the Saffir- Simpson scale. Texas is home to 25 of the nation's 144 operating refineries, the most of any state. All but seven of the plants are in coastal cities. Four plants, representing 5 percent of U.S. capacity, remain shut because of Katrina last month.

Gasoline for October delivery jumped 12.94 cents, or 6.3 percent, to $2.1825 a gallon at 11:21 a.m. on the New York Mercantile Exchange. Gasoline futures reached $2.2025, the highest since Sept. 2. Prices touched $2.92 a gallon on Aug. 31, the highest since trading began in 1984. Futures are 63 percent higher than a year ago.

``If some refineries are damaged prices will rise higher than they did as a result of Katrina,'' said Phil Flynn, vice president of risk management at Alaron Trading Corp. ``There would be record pump prices, which would eventually go down because demand will fall as the economy falters. There comes a point when people will reduce driving and I think we're close.''

Regular-grade gasoline, averaged nationwide, fell 0.9 cent to $2.755 a gallon yesterday, according to data released today by the AAA, the nation's largest motoring organization. Prices have declined 9.9 percent since touching a record $3.057 on Sept. 2. Pump prices are 48 percent higher than a year ago.

`Worse Than Katrina'

``There are no adjectives that properly describe the threat Rita poses,'' said Michael Fitzpatrick, vice president of energy risk management with Fimat USA in New York. ``This could be much worse than Katrina.''

Rita, with maximum sustained winds of 165 mph (265 kph), is ``potentially catastrophic,'' the National Hurricane Center said today in an advisory at 10 a.m. Houston time. The storm is forecast to hit land near Galveston, Texas, late tomorrow or early Sept. 24. Rita's center was 460 miles southeast of Galveston, and moving west-northwest at close to 9 mph.

Crude oil for November delivery rose 90 cents, or 1.4 percent, to $67.70 a barrel in New York. Futures have declined 4.4 percent since touching a record $70.85 a barrel on Aug. 30, the day after Katrina made landfall. Prices are 40 percent higher than a year ago.

Refineries Shut

Exxon Mobil is shutting its Baytown refinery in Texas, the company said. The Baytown refinery is the biggest in the U.S., processing 557,000 barrels of oil a day. The company said it was also closing its Beaumont refinery, which can process 348,500 barrels a day.

BP Plc said it shut its crude-oil refinery in Texas City, Texas, the nation's fourth-largest, to prepare for Rita. The facility can process 460,000 barrels a day.

``Shuttered refineries will take at least two weeks to resume operations,'' Fitzpatrick said.

Heating oil for October delivery rose 4.03 cents, or 2 percent, to $2.079 a gallon. Futures touched $2.21 on Sept. 1, the highest in 27 years of trading on the exchange. Heating oil is 55 percent higher than a year ago.

Natural gas for October delivery rose 44.6 cents, or 3.5 percent, to $13.04 per million British thermal units. Prices touched $13.42, the highest since the futures started trading in 1990. Prices have more than doubled in the past year.

Heating Costs

Consumers using heating oil are likely to spend 31 percent more to heat their homes this winter compared with a year earlier, the Energy Department reported this month. Those who heat with natural gas face a 71 percent increase from last year.

``Rita could put a damper on the Christmas spirit,'' Flynn said. ``People won't shop for gifts when they can't pay their heating bills.''

In London, the November Brent crude-oil futures contract rose 64 cents, or 1 percent, to $65.37 a barrel on the International Petroleum Exchange. Prices touched $68.89 on Aug. 30, the highest since trading began in 1988.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

Last Updated: September 22, 2005 12:10 EDT