Crude futures down as Rita downgraded

Crude oil futures were down on Friday as Hurricane Rita was downgraded in strength and was now expected to miss a direct hit on Houston, the center of oil refining in Texas, and even though nearly 30 percent of US refining capacity is currently shut down from a combination of damage already caused by Hurricane Katrina and ahead of Rita’s landfall, now expected either late Friday night or early Saturday morning.

In addition, a good part of oil and gas production in the Gulf of Mexico is offline due to the storm. The high level of closures have kept refiner’s margins at nearly $20 per barrel of gasoline or heating oil refined.

November delivery West Texas Intermediate crude on the New York Mercantile Exchange was down $2.31 on the day to close at $64.19 per barrel, down more than $6 from its record high, reached in late August but up slightly on the week.

Meanwhile, Brent crude November contracts on the International Petroleum Exchange in London was down $2.16 for the day to $66.44 per barrel. Brent crude was also about $6 lower than its peak price, but it was still up around $1 on the week.