Crude oil prices rise after Rita

Several refineries in Texas have restarted after Hurricane Rita

Oil prices have risen as the industry continues to evaluate the damage caused to facilities in the Gulf of Mexico by Hurricane Rita.

Prices initially fell on Monday after Rita did not prove as damaging as initially feared.

Yet with 16 Texan oil refineries still shut down following the tropical storm, the sector remains jittery.

US light crude closed up $1.63 to $65.82 a barrel after Monday trading, while Brent gained $1.49 to $63.93.

Rita temporarily closed all offshore oil output in the Gulf of Mexico, but the storm veered east of the main US oil refining region around Houston, limiting the impact on refineries there.

President George W Bush said the refining capacity shut by Rita would be back on line soon, but urged US motorists to limit their petrol consumption in the meantime.

"A lot of our production comes from the Gulf [of Mexico] and when you have a Hurricane Katrina followed by a Hurricane Rita, it's natural, unfortunately, that it's going to affect supplies," he said.

Supply pressure

The Federal Emergency Management Agency said it believed the long-term damage to refineries would be minimal.

Several drilling platforms in the Gulf of Mexico have been damaged, but Texas Governor Rick Perry said that offshore oil facilities appeared, in general, to be in "relatively good shape".

Analysts said that disruption caused by Rita would inevitably put more strain on already tight supplies of gasoline, diesel fuel and heating fuel.

However, they said that the US government and international agencies would release supplies from stockpiles in the event of any shortages.

"There's still crude out there that can make up for any loss in production," confirmed Doug MacIntyre, senior analyst with the US government's Energy Information Administration.