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Humberto strengthened even quicker than anyone thought it would and crashed ashore early this morning as a category one hurricane. Humberto hit the Texas shore in the area of High Island and Port Arthur at about 2 am CDT with 85 mph winds and heavy rains. The quick strengthening of the storm was quite shocking, since the storm grew to a hurricane less than 24 hours after being classified a tropical depression.

Humberto has already proven to be a little more destructive than most first believed it would be. Valero Corporation (NYSE:VLO) said that its Port Arthur refinery, the companies largest refinery, has had the power knocked out and has been shut down for the time being. The Valero plant can produce up to 325,000 barrels of crude per day. Total SA (NYSE:TOT), Europe's third-largest oil company, reports that their Port Arthur plant which produces 240,000 barrels of oil per day is also without power and down for the time being.

Humberto has already dumped as much as six inches of rain on Beaumont and Port Arthur Texas, with plenty more to come. Houston was primarily spared, receiving some heavy rains, but no sustained winds above 30 mph.

Interestingly, Hurricane Humberto has taken a very similar path to the destructive Hurricane Rita from a couple years ago, when it hit the Port Arthur area quite hard.

The oil refinery situation will be one to watch, as I said in last night's post, if the crude oil supply is affected for any length of time from these oil refinery closings the price of crude oil and gasoline will continue to rise. Gasoline prices are currently higher on the day, with oil prices slightly lower on profit-taking from their record closes of late.

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