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Oil rises on lingering refinery concerns
Source: Agencies |
May 14, 2011, Saturday
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OIL settled higher yesterday, pushed up by lingering concerns that refineries in the US Southeast may be affected by Mississippi River flooding.
Benchmark crude for June delivery settled at US$99.65 per barrel, up 68 cents on the New York Mercantile Exchange. Oil has been volatile this week, ranging from US$95 to US$104 a barrel. It gained two and a half percent for the week after losing 15 percent last week.
Most refineries in the Gulf States region don't expect to be affected by flooding from the Mississippi River. Still, some have lined their facilities with sandbags, moved equipment and prepared other emergency measures. At least one refinery near Baton Rouge, Louisiana, run by Alon USA Energy, plans to close if federal engineers open a massive spillway this weekend to divert floodwaters from Baton Rouge and New Orleans. Hundreds of thousands of acres (hectares) will be flooded elsewhere.
Analyst Addison Armstrong with Tradition Energy said the flooding could halt almost 253 million cubic feet (7.16 million cubic meters) of natural gas production per day in Louisiana as well, according to state officials.
And there are concerns that crude oil shipments and other commercial traffic on the river could be slowed by high water, according to PFGBest analyst Phil Flynn. Delays in getting gasoline from refiners to wholesalers have already contributed to higher pump prices in parts of the Southeast and the Midwest.
Meanwhile, drivers across the country are paying about the same for gasoline as a week ago, with the national average at US$3.982 a gallon, according to AAA, Wright Express and the Oil Price Information Service. Motorists in 15 states and the District of Columbia pay more than US$4 a gallon (US$1 a liter). The price is 17.4 cents more than it was a month ago and US$1.092 more than a year ago.
Many analysts think pump prices will fall to around US$3.50 a gallon or less by Memorial Day, as refineries sidelined by temporary outages produce more gas and oil prices retreat.
The Labor Department reported that inflation in April rose to the highest level in two years as consumers paid more for gas and food products. Inflationary pressure began to ease in May as prices for oil, corn, wheat and other commodities declined.
In other Nymex trading in June contracts, heating oil rose 2.85 cents to settle at US$2.9422 per gallon, gasoline futures added 1.05 cents to settle at US$3.0744 a gallon and natural gas gained 5.5 cents to settle at US$4.311 per 1,000 cubic feet.
In London, Brent crude rose 85 cents to settle at US$113.83 per barrel on the ICE Futures exchange.
Benchmark crude for June delivery settled at US$99.65 per barrel, up 68 cents on the New York Mercantile Exchange. Oil has been volatile this week, ranging from US$95 to US$104 a barrel. It gained two and a half percent for the week after losing 15 percent last week.
Most refineries in the Gulf States region don't expect to be affected by flooding from the Mississippi River. Still, some have lined their facilities with sandbags, moved equipment and prepared other emergency measures. At least one refinery near Baton Rouge, Louisiana, run by Alon USA Energy, plans to close if federal engineers open a massive spillway this weekend to divert floodwaters from Baton Rouge and New Orleans. Hundreds of thousands of acres (hectares) will be flooded elsewhere.
Analyst Addison Armstrong with Tradition Energy said the flooding could halt almost 253 million cubic feet (7.16 million cubic meters) of natural gas production per day in Louisiana as well, according to state officials.
And there are concerns that crude oil shipments and other commercial traffic on the river could be slowed by high water, according to PFGBest analyst Phil Flynn. Delays in getting gasoline from refiners to wholesalers have already contributed to higher pump prices in parts of the Southeast and the Midwest.
Meanwhile, drivers across the country are paying about the same for gasoline as a week ago, with the national average at US$3.982 a gallon, according to AAA, Wright Express and the Oil Price Information Service. Motorists in 15 states and the District of Columbia pay more than US$4 a gallon (US$1 a liter). The price is 17.4 cents more than it was a month ago and US$1.092 more than a year ago.
Many analysts think pump prices will fall to around US$3.50 a gallon or less by Memorial Day, as refineries sidelined by temporary outages produce more gas and oil prices retreat.
The Labor Department reported that inflation in April rose to the highest level in two years as consumers paid more for gas and food products. Inflationary pressure began to ease in May as prices for oil, corn, wheat and other commodities declined.
In other Nymex trading in June contracts, heating oil rose 2.85 cents to settle at US$2.9422 per gallon, gasoline futures added 1.05 cents to settle at US$3.0744 a gallon and natural gas gained 5.5 cents to settle at US$4.311 per 1,000 cubic feet.
In London, Brent crude rose 85 cents to settle at US$113.83 per barrel on the ICE Futures exchange.
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