Gas Could Top $3 This Weekend

The storm closed at least eight U.S. oil refineries with the capacity to produce about 1.8 million barrels of oil products, or more than 10 percent of the nation's total, according to data compiled yesterday by Bloomberg News.

Marathon Oil Corp., for example, shut down and evacuated all its oil platforms and refineries in the area before the storm hit and just yesterday began sending employees back to estimate "what, if any, damage was done," spokesman Paul Weeditz said.

Valero Energy Corp.'s large St. Charles refinery near New Orleans still had no power yesterday, said Mary Rose Brown, senior vice president of corporate communications. It appears the facility has no major damage but will need some minor repairs. But it may take up to three days before the plant has power and up to a week before it can resume operating, she said.

Royal Dutch Shell PLC said two of its drilling rigs had "drifted off location" and would be towed in for repairs.

The Energy Department said yesterday it was considering one company's request for a loan from the nation's Strategic Petroleum Reserve, an emergency supply of nearly 700 million barrels of oil stored in underground caverns along the coast of the Gulf of Mexico. The department "will review any additional requests if they are made," spokesman Craig Stevens said.

The government loaned 5.4 million barrels of crude oil last year to refineries whose supplies disrupted by Hurricane Ivan.

But if the refineries are not up and operating, they will not be able to turn the extra oil into gasoline, diesel fuel, jet fuel and heating oil, analysts said.

Oil from the reserve "can prevent oil prices from going to $80 a barrel . . . but if refineries are off, it doesn't matter how much more oil they get -- product prices are likely to continue rising," said Jason Schenker, an economist at Wachovia Corp.

If the oil supplies and refinery operations resume quickly, then energy prices may spike temporarily and then come back down, with only transitory economic effects, analysts said. But if product prices stay high, that "is going to hurt consumers, particularly at the lower end of the income distribution," Schenker said.

The national price for regular gasoline averaged $2.60 a gallon yesterday, the same as the day before, said John B. Townsend II, the manager for public and government affairs for the AAA Mid-Atlantic auto club.

The group is forecasting that nearly 29 million Americans -- including about 450,00 in the Washington area -- will travel 50 miles or more this Labor Day weekend. And Townsend said motorists may "fuss and curse" at higher pump prices but are unlikely to change their vacation plans at the last minute.

Estimates of losses covered by insurance varied widely as carriers struggled to get adjusters into the affected area to assess the damage. Some computer estimates reached as high as $25 billion. That would make Katrina more costly than Hurricane Andrew, the most expensive storm on record, which caused nearly $21 billion in insured damage, valued in today's dollars.

However, a spokeswoman for the Insurance Information Institute, an industry group, said, "We're thinking in the $16 billion category," though she cautioned that no one really knows yet.

Louis Armstrong New Orleans International Airport, the city's largest airport, remained closed yesterday, although air traffic controllers working off power generators planned to open one runway for flights assisting the relief effort. Airports in Gulfport, Miss., and Mobile, Ala., remained closed due to water and debris damage and are likely to stay closed for several days, the Federal Aviation Administration said.

Amtrak suspended passenger service in the area until Sept. 7.

Freight railroad company CSX Corp. said its officials flew over the Mississippi and Louisiana shoreline yesterday to inspect their tracks and found much of the rail under water.

"It looks like we have rather substantial damage along the coast" from Pensacola, Fla., west to New Orleans, CSX spokesman Gary Sease said.

Staff writers Al Crenshaw, Sara Goo and Dana Hedgpeth contributed to this story.