Sept. 21 (Bloomberg) -- Crude oil and gasoline jumped as Hurricane Rita barreled toward the Texas coast, threatening the biggest concentration of U.S. refineries.

``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. This is something OPEC can't do anything to remedy.''

BP Plc and Valero Energy Corp. are evacuating workers and slowing output at three Houston area refineries. Rita, a Category 4 storm, may hit the Texas coast on Sept. 24. Four refineries in Louisiana and Mississippi, representing 5 percent of U.S. capacity, remain shut because of Hurricane Katrina. Texas refineries account for 26 percent of the U.S. total.

Crude oil for November delivery rose $1.37, or 2.1 percent, to $67.60 a barrel at 12:07 p.m. on the New York Mercantile Exchange. Futures touched $68.27, the highest since Sept. 2. Oil has declined 4.6 percent since touching a record $70.85 a barrel on Aug. 30. Prices are 43 percent higher than a year ago.

Gasoline for October delivery surged 11.34 cents, or 5.7 percent, to $2.09 a gallon. Gasoline futures reached $2.92 a gallon on Aug. 31, the highest since trading began in 1984. Futures are 62 percent higher than a year ago.

Evacuations

BP's Texas City refinery, the third-largest in the U.S., is shutting some units and evacuating some employees because of Rita, a company spokesman said. The refinery can process 460,000 barrels of crude oil a day.

Valero, the largest U.S. crude-oil refiner, said that its Texas City and Houston refineries are cutting processing rates to a minimum and preparing for possible shutdowns because of Rita. The two facilities can process a total of 378,000 barrels of crude oil a day.

Texas' 26 refineries have the capacity to process 4.6 million barrels of crude oil a day, according to the Energy Department. Most of the state's refineries are located along the coast in the Corpus Christi, Houston and Port Arthur areas. Louisiana is the second-biggest refining state.

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.

`Worst-Case Scenario'

``Rita is developing into our worst-case scenario,'' said John Kilduff, vice president of risk management at Fimat USA in New York. ``This is headed right into our other major refining center just after all the damage done to facilities in Louisiana. From an energy perspective it doesn't get any worse.''

Exxon Mobil Corp., 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.

``This has the potential to be a real powerful storm, and after the damage caused by Katrina nobody's taking any chances,'' said Justin Fohsz, a broker at Starsupply Petroleum Inc. in Englewood, New Jersey. ``There are a lot of refineries in Texas. Even if it misses the offshore platforms there will be disruptions due to the evacuations.''

Rita today strengthened 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.

Rita's maximum sustained winds accelerated to 140 mph (225 kph) as of 10 a.m. local time, the National Hurricane Center in Miami said. That leaves the storm one level short of the maximum Category 5 on the Saffir-Simpson scale of intensity.

`Pearl Harbor'

``Hurricane paths are like spinning the bottle, you don't know where they're going to hit until about three hours from landfall,'' said Matthew Simmons, chief executive of Simmons & Co., a private investment bank in Houston for the oil and gas industry. ``Anything south of Corpus Christi and we're fine. It could be Pearl Harbor.''

The hurricane's reach may extend anywhere from northeast Mexico along the Texas coast to the western half of Louisiana, according to the center.

Regular-grade gasoline, averaged nationwide, fell 2.4 cents to $2.764 a gallon yesterday, according to data released today by the AAA, the nation's largest motoring organization. Prices have declined 9.6 percent since touching a record $3.057 on Sept. 2. Pump prices are 49 percent higher than a year ago.

Heating oil for October delivery rose 3.62 cents, or 1.8 percent, to $2.0475 a gallon. Futures touched $2.21 on Sept. 1, the highest in 27 years of trading on the exchange. Heating oil is 57 percent higher than a year ago.

Economic Shock

``We're one storm away from a big shock to the economy,'' said Neal Soss, an economist at Credit Suisse First Boston in New York. ``The shock to the economy from Katrina was bad enough. We have a very severe dependency on a very limited infrastructure because we really haven't invested enough in refining capacity for a long time.''

The last refinery built in the U.S. was a Marathon Oil Corp. plant in Garyville, Louisiana, that opened in 1976.

The Organization of Petroleum Exporting Countries, which pumps about 40 percent of the world's oil, agreed at its meeting in Vienna yesterday 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.

Oil Inventories

U.S. crude-oil inventories fell 322,000 barrels to 308.1 million barrels last week, according to the Energy Department. An increase of 1 million barrels was expected, according to the median of forecasts by 13 analysts surveyed by Bloomberg.

Stockpiles of gasoline and distillate fuel, a category that includes heating oil and diesel, unexpectedly increased as refineries raised operating rates.

``The inventory report was bearish but is being ignored,'' Mueller said. ``Rita is all we want to talk about even here thousand s of miles from the U.S. The builds in gasoline and distillate could turn negative real quickly if refineries are down as a result of Rita.''

In London, the November Brent crude-oil futures contract rose $1.20, or 1.9 percent, to $65.40 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 21, 2005 12:31 EDT