Oil prices rise on back of gasoline rally
Crude-oil futures rose Monday on the heels of a rally in gasoline that brokers attributed to a shipping snag along the U.S. Gulf Coast that was having some impact on refinery operations.
The Coast Guard said Sunday that only limited tug and barge traffic had resumed through the Calcasieu Ship Channel, which had been off limits due to the spread of oil from a spill last week at the Citgo Petroleum Corp. facility in Lake Charles, La.
“The longer this thing stays backed up, the more likely those refineries are going to have to cut back,” said Tom Bentz, a broker for BNP Paribas Commodity Futures in New York.
Dow Jones Newswires reported last week that Citgo and ConocoPhillips, which combined refine close to 700,000 barrels a day, had experienced some minor impact on their operations from delays in crude-oil shipments. The companies did not immediately return calls made by The Associated Press on Monday.
Light sweet crude for August delivery climbed 93 cents to settle at $71.80 a barrel on the New York Mercantile Exchange, where gasoline futures were up more than 5 cents to finish at $2.1788 per gallon.
In London, Brent crude futures on the ICE Futures exchange climbed 80 cents to close at $70.73 per barrel.
Also propping up oil prices were threats from
Iran’s oil minister over the weekend that his country could disrupt the world’s supply if it were punished amid an international standoff over its nuclear program.
“If the country’s interests are attacked, we will use oil as a weapon,” Iran state television quoted Kazem Vaziri Hamaneh as saying Sunday.
The United States and its European allies say Iran has been enriching uranium in an attempt to produce nuclear weapons, but Tehran says the uranium will be used only for a peaceful nuclear energy program.
Washington has warned Iran that it could face political and economic sanctions before the
U.N. Security Council if it doesn’t stop its nuclear activities.
Hamaneh said that a supply disruption by Iran ”” the world’s fourth-largest oil producer and exporter ”” would drive oil prices above $100 a barrel.
“There’s a risk premium that has been built in the oil price,” said Adrian Loh, a Singapore-based regional oil analyst for Merrill Lynch. “Without any resolution from Iran, prices will stay the same around $70.”
In other Nymex trading, heating oil futures rose 1.63 cent to settle at $1.9789 per gallon, while natural gas futures slid by 25.7 cents to settle at $5.969 per 1,000 cubic feet.
Source: AP
