American airlines - crisis getting worse

Refinery outages caused by Hurricanes Rita and Katrina have made worse an already bad situation for U.S. airlines. In addition to record crude prices, the airlines are paying as much as a 60 percent premium for refined jet fuel. That has pushed the price they pay per barrel of fuel above $100.

Crude oil prices have risen but strong demand combined with a bottleneck in refining capacity has pushed prices of gasoline, heating oil, and jet fuel to record high levels. And it is expected to get worse.

The back-to-back hurricanes damaged some U.S. Gulf Coast area refineries, shutting about 18 percent of U.S. capacity. Of this, about 2.09 million barrels, or 12 percent of refining capacity will not be restarting for several weeks, leaving a supply shortfall and forcing providers to parcel out or even cancel on some obligations.

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