Oil refinery
Oil refinery - 
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Scott Jagow: Usually, Labor Day is quiet for the financial markets. Wall Street's closed. Overseas, there isn't a whole lot of activity. But this Labor Day, things are pretty volatile. Angst about the global economy won't go away. In Asia, the markets closed almost 2 percent lower. European shares have lost some value so far. The British pound hit a 12-year low this morning. And the price of oil is all over the place with Gustav bearing down on the Gulf Coast oil complex. Oil prices shot up at first, then they fell back down. Right now, oil's at about $114 a barrel.

We turn now to Jorge Pinon. He used to work in the oil industry and is now at the University of Miami. Jorge, what's the biggest concern for oil companies with Gustav?

Jorge Pinon: The Achilles heel of the system is the refining system. Crude oil production can come back on stream. Pipeline systems can come back on stream. But if somehow we lose refinery capacity, we don't have the capacity then to turn crude oil into refined products that both you and I need, whether it's gasoline, diesel or jet fuel. Right now, all that we have lost is production. This is nothing major, since most refineries already have inventories. And remember that we do have the strategic oil reserves, so that will give us at least a few days of oil supply if we need it.

Jagow: So, Jorge if there is significant damage to refining capacity, what kind of scenario could we see with oil prices?

Pinon: I would not be surprised if you see crude oil prices move anywhere in between the $1-$2 range. Once damage assessment has been made to the system, then you'll see a true reaction in the marketplace. But the industry is certainly prepared, so I think damage could very well be minimal to the system.

Jagow: Well on that point, oil companies say they are much more storm resistant with their platforms than they were three years ago with Katrina. You buying that?

Pinon: Yes, I'm buying that because we are better prepared because we already have the experience of a major catastrophic event in your industry that we never had before. It is not necessary that our technology is better, it's that our know-how is better. So, I know for a fact that the industry is much better prepared to manage this kind of risk.

Jagow: Jorge Pinon, an energy fellow with the University of Miami. Thanks for joining us.

Pinon: My pleasure.